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Poultry industry in North America Los Cabos, Baja California Sur June 13, 2008

Pultry industry in north america

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Page 1: Pultry industry in north america

Poultry industry in North America

Los Cabos, Baja California Sur

June 13, 2008

Page 2: Pultry industry in north america

2

Consumer confidence in the US

40

60

80

100

120

140

160

Jun-

97N

ov-9

7Ap

r-98

Sep-

98Fe

b-99

Jul-9

9D

ec-9

9M

ay-0

0O

ct-0

0M

ar-0

1Au

g-01

Jan-

02Ju

n-02

Nov

-02

Apr-

03Se

p-03

Feb-

04Ju

l-04

Dec

-04

May

-05

Oct

-05

Mar

-06

Aug-

06Ja

n-07

Jun-

07N

ov-0

7Ap

r-08

Consumer Confidence Index (1985=100)

Consumer Expectations Index (1985=100)

Source: Polling report with data from the Conference BoardNext data release: June 24

Page 3: Pultry industry in north america

3

Consumer confidence in Mexico

(2003=100)Source: INEGINext data release: June 4

90

95

100

105

110

Jan-

05Fe

b-05

Mar

-05

Apr-0

5M

ay-0

5Ju

n-05

Jul-0

5A

ug-0

5S

ep-0

5O

ct-0

5N

ov-0

5D

ec-0

5Ja

n-06

Feb-

06M

ar-0

6Ap

r-06

May

-06

Jun-

06Ju

l-06

Aug

-06

Sep

-06

Oct

-06

Nov

-06

Dec

-06

Jan-

07Fe

b-07

Mar

-07

Apr-0

7M

ay-0

7Ju

n-07

Jul-0

7A

ug-0

7S

ep-0

7O

ct-0

7N

ov-0

7D

ec-0

7Ja

n-08

Feb-

08M

ar-0

8Ap

r-08

May

-08

Page 4: Pultry industry in north america

4

Global indicator of economic activity

125

130

135

140

145

150

155

Source: INEGI (1993=100), seasonally adjusted

Next data release: May 29

Page 5: Pultry industry in north america

5

Industrial production growth

-6

-3

0

3

6

9

12

Jan-

06

Feb-

06

Mar

-06

Apr

-06

May

-06

Jun-

06

Jul-0

6

Aug

-06

Sep

-06

Oct

-06

Nov

-06

Dec

-06

Jan-

07

Feb-

07

Mar

-07

Apr

-07

May

-07

Jun-

07

Jul-0

7

Aug

-07

Sep

-07

Oct

-07

Nov

-07

Dec

-07

Jan-

08

Feb-

08

Mar

-08

(%)

Total Manufacturing

Annual growth rate

Source: INEGI, data set 2003=100Next data release: June 25

* In 2008, holly week in Mexico occurred last March while in 2007 it took place in April. This leap implied less days of economic activity in March than in the previous year

* Holly week in March

Page 6: Pultry industry in north america

6

10,000,000

11,000,000

12,000,000

13,000,000

14,000,000

15,000,000

Jan-

98

Jun-

98

Nov

-98

Apr-

99

Sep-

99

Feb-

00

Jul-0

0

Dec

-00

May

-01

Oct

-01

Mar

-02

Aug-

02

Jan-

03

Jun-

03

Nov

-03

Apr-

04

Sep-

04

Feb-

05

Jul-0

5

Dec

-05

May

-06

Oct

-06

Mar

-07

Aug-

07

Jan-

08

Employment in formal sector

Source: Insured workers at the Mexican Institute of Social Security (IMSS)

Next data release: June 18

Abr-08

Page 7: Pultry industry in north america

7

GDP annual growth*

0%

1%

2%

3%

4%

5%

6%

7%

2005Q1 2005Q2 2005Q3 2005Q4 2006Q1 2006Q2 2006Q3 2006Q4 2007Q1 2007Q2 2007Q3 2007Q4 2008Q1

US Mexico

*/ Real Gross Domestic Product: percent change from quarter one year agoSource: INEGI y USDOC

Page 8: Pultry industry in north america

8

Mexico’s export performance

Annual Growth Rate

Source: INEGI and USDOC

-5%

0%

5%

10%

15%

20%

25%

30%

35%

1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

Total US

Page 9: Pultry industry in north america

9

Mexico’s monthly export performance

*/ Percentage change from the month a year ago

Source:INEGI y USDOC

Annual Growth Rate*

-5%

0%

5%

10%

15%

20%

25%

Aug

-06

Sep

-06

Oct

-06

Nov

-06

Dec

-06

Jan-

07

Feb-

07

Mar

-07

Apr

-07

May

-07

Jun-

07

Jul-0

7

Aug

-07

Sep

-07

Oct

-07

Nov

-07

Dec

-07

Jan-

08

Feb-

08

Mar

-08

Apr

-08

US Total

Next data release: June 14 for the US and June 10 for Mexico

Page 10: Pultry industry in north america

10

Share of US total imports

Source: USDOC

4

6

8

10

12

14

16

18

20

1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

Mexico Canada Germany China Japan

Per

cent

age

Page 11: Pultry industry in north america

11

Gross fixed Investment in Mexico

Annual growth rate

-5

0

5

10

15

20

25

Jan-

05Fe

b-05

Mar

-05

Apr-

05M

ay-0

5Ju

n-05

Jul-0

5Au

g-05

Sep-

05O

ct-0

5N

ov-0

5D

ec-0

5Ja

n-06

Feb-

06M

ar-0

6Ap

r-06

May

-06

Jun-

06Ju

l-06

Aug-

06Se

p-06

Oct

-06

Nov

-06

Dec

-06

Jan-

07Fe

b-07

Mar

-07

Apr-

07M

ay-0

7Ju

n-07

Jul-0

7Au

g-07

Sep-

07O

ct-0

7N

ov-0

7D

ec-0

7Ja

n-08

Feb-

08M

ar-0

8

Perc

enta

ge

Total Machinery and Equipment

Source: INEGINext data release: June 15

Page 12: Pultry industry in north america

12

Mexico’s imports of capital goods

Source: INEGI

Monthly Growth(Variation over the same month of the last year)

Next data release: July 10

0%

5%

10%

15%

20%

25%

30%

Aug-

06

Sep-

06

Oct

-06

Nov

-06

Dec

-06

Jan-

07

Feb-

07

Mar

-07

Apr-

07

May

-07

Jun-

07

Jul-0

7

Aug-

07

Sep-

07

Oct

-07

Nov

-07

Dec

-07

Jan-

08

Feb-

08

Mar

-08

Apr-

08

Page 13: Pultry industry in north america

13

2.0

2.5

3.0

3.5

4.0

4.5

5.0

5.5

6.0

Jan-

03Fe

b-03

Mar

-03

Apr-

03M

ay-0

3Ju

n-03

Jul-0

3Au

g-03

Sep-

03O

ct-0

3N

ov-0

3D

ec-0

3Ja

n-04

Feb-

04M

ar-0

4Ap

r-04

May

-04

Jun-

04Ju

l-04

Aug-

04Se

p-04

Oct

-04

Nov

-04

Dec

-04

Jan-

05Fe

b-05

Mar

-05

Apr-

05M

ay-0

5Ju

n-05

Jul-0

5Au

g-05

Sep-

05O

ct-0

5N

ov-0

5D

ec-0

5Ja

n-06

Feb-

06M

ar-0

6Ap

r-06

May

-06

Jun-

06Ju

l-06

Aug-

06Se

p-06

Oct

-06

Nov

-06

Dec

-06

Jan-

07Fe

b-07

Mar

-07

Apr-

07M

ay-0

7Ju

n-07

Jul-0

7Au

g-07

Sep-

07O

ct-0

7N

ov-0

7D

ec-0

7Ja

n-08

Feb-

08M

ar-0

8Ap

r-08

May

-08

%

Source: INEGINext data release: July 7

Mexico's inflation begins to pick up

Monthly series: annual inflation

Page 14: Pultry industry in north america

14

Government of Mexico has taken measures

Opening of grains and animal feed to international markets

Agricultural support: fertilizers, diesel

Income complement to poor consumers

Constant gasoline and diesel prices

No export promotion ideas

Congressional elections July 2009

Page 15: Pultry industry in north america

15

Real food prices in Mexico

*CPI= National Consumer Price Index, January 1994 = 100 Source: Banxico

55

65

75

85

95

105

Jan-

90A

pr-9

0Ju

l-90

Oct

-90

Jan-

91A

pr-9

1Ju

l-91

Oct

-91

Jan-

92A

pr-9

2Ju

l-92

Oct

-92

Jan-

93A

pr-9

3Ju

l-93

Oct

-93

Jan-

94A

pr-9

4Ju

l-94

Oct

-94

Jan-

95A

pr-9

5Ju

l-95

Oct

-95

Jan-

96A

pr-9

6Ju

l-96

Oct

-96

Jan-

97A

pr-9

7Ju

l-97

Oct

-97

Jan-

98A

pr-9

8Ju

l-98

Oct

-98

Jan-

99A

pr-9

9Ju

l-99

Oct

-99

Jan-

00A

pr-0

0Ju

l-00

Oct

-00

Jan-

01A

pr-0

1Ju

l-01

Oct

-01

Jan-

02A

pr-0

2Ju

l-02

Oct

-02

Jan-

03A

pr-0

3Ju

l-03

Oct

-03

Jan-

04A

pr-0

4Ju

l-04

Oct

-04

Jan-

05A

pr-0

5Ju

l-05

Oct

-05

Jan-

06A

pr-0

6Ju

l-06

Oct

-06

Jan-

07A

pr-0

7Ju

l-07

Oct

-07

Jan-

08A

pr-0

8

Food Meat Milk, Dairy Products and Eggs

Food Prices Relative to the CPI*

Page 16: Pultry industry in north america

16

Real meat prices in Mexico

*CPI= National Consumer Price Index, January 1994 = 100 Source: Banxico

Meat Prices Relative to the CPI*

40

50

60

70

80

90

100

110

Ene

-90

Abr

-90

Jul-9

0O

ct-9

0E

ne-9

1A

br-9

1Ju

l-91

Oct

-91

Ene

-92

Abr

-92

Jul-9

2O

ct-9

2E

ne-9

3A

br-9

3Ju

l-93

Oct

-93

Ene

-94

Abr

-94

Jul-9

4O

ct-9

4E

ne-9

5A

br-9

5Ju

l-95

Oct

-95

Ene

-96

Abr

-96

Jul-9

6O

ct-9

6E

ne-9

7A

br-9

7Ju

l-97

Oct

-97

Ene

-98

Abr

-98

Jul-9

8O

ct-9

8E

ne-9

9A

br-9

9Ju

l-99

Oct

-99

Ene

-00

Abr

-00

Jul-0

0O

ct-0

0E

ne-0

1A

br-0

1Ju

l-01

Oct

-01

Ene

-02

Abr

-02

Jul-0

2O

ct-0

2E

ne-0

3A

br-0

3Ju

l-03

Oct

-03

Ene

-04

Abr

-04

Jul-0

4O

ct-0

4E

ne-0

5A

br-0

5Ju

l-05

Oct

-05

Ene

-06

Abr

-06

Jul-0

6O

ct-0

6E

ne-0

7A

br-0

7Ju

l-07

Oct

-07

Ene

-08

Abr

-08

Poultry Swine Beef

Page 17: Pultry industry in north america

17

Real corn prices in Mexico

*CPI= National Consumer Price Index, January 1994 = 100 Source: Banxico

Corn Prices Relative to the CPI*

75

90

105

120

Ene

-90

Abr

-90

Jul-9

0O

ct-9

0E

ne-9

1A

br-9

1Ju

l-91

Oct

-91

Ene

-92

Abr

-92

Jul-9

2O

ct-9

2E

ne-9

3A

br-9

3Ju

l-93

Oct

-93

Ene

-94

Abr

-94

Jul-9

4O

ct-9

4E

ne-9

5A

br-9

5Ju

l-95

Oct

-95

Ene

-96

Abr

-96

Jul-9

6O

ct-9

6E

ne-9

7A

br-9

7Ju

l-97

Oct

-97

Ene

-98

Abr

-98

Jul-9

8O

ct-9

8E

ne-9

9A

br-9

9Ju

l-99

Oct

-99

Ene

-00

Abr

-00

Jul-0

0O

ct-0

0E

ne-0

1A

br-0

1Ju

l-01

Oct

-01

Ene

-02

Abr

-02

Jul-0

2O

ct-0

2E

ne-0

3A

br-0

3Ju

l-03

Oct

-03

Ene

-04

Abr

-04

Jul-0

4O

ct-0

4E

ne-0

5A

br-0

5Ju

l-05

Oct

-05

Ene

-06

Abr

-06

Jul-0

6O

ct-0

6E

ne-0

7A

br-0

7Ju

l-07

Oct

-07

Ene

-08

Abr

-08

Page 18: Pultry industry in north america

18*NPPI= National Producer Price Index, January 1994 = 100 Source: Banxico

Real producer prices in Mexico

Grains-based Animal Feed Prices Relative to the NPPI*

80

95

110

125

140

155

170

Jan-

94A

pr-9

4Ju

l-94

Oct

-94

Jan-

95A

pr-9

5Ju

l-95

Oct

-95

Jan-

96A

pr-9

6Ju

l-96

Oct

-96

Jan-

97A

pr-9

7Ju

l-97

Oct

-97

Jan-

98A

pr-9

8Ju

l-98

Oct

-98

Jan-

99A

pr-9

9Ju

l-99

Oct

-99

Jan-

00A

pr-0

0Ju

l-00

Oct

-00

Jan-

01A

pr-0

1Ju

l-01

Oct

-01

Jan-

02A

pr-0

2Ju

l-02

Oct

-02

Jan-

03A

pr-0

3Ju

l-03

Oct

-03

Jan-

04A

pr-0

4Ju

l-04

Oct

-04

Jan-

05A

pr-0

5Ju

l-05

Oct

-05

Jan-

06A

pr-0

6Ju

l-06

Oct

-06

Jan-

07A

pr-0

7Ju

l-07

Oct

-07

Jan-

08A

pr-0

8

Wheat Mill Corn Mill Animal Feed Products

Page 19: Pultry industry in north america

19

Target US federal funds rateand oil prices

Source: Federal Reserve Board, “Intended Federal Funds Rate” and PEMEX

2.00%

2.50%

3.00%

3.50%

4.00%

4.50%

5.00%

5.50%

Jan-

05

Mar

-05

May

-05

Jul-0

5

Sep

-05

Nov

-05

Jan-

06

Mar

-06

May

-06

Jul-0

6

Sep

-06

Nov

-06

Jan-

07

Mar

-07

May

-07

Jul-0

7

Sep

-07

Nov

-07

Jan-

08

Mar

-08

May

-08

0

20

40

60

80

100

120

140

West Texas Intermediate Brent Mexican blend Intended Federal Funds rate

$ U

SRat

e

Page 20: Pultry industry in north america

20

Commodity prices

Source: United Nations Conference on Trade and Development; Addressing the Global Food Crisis: Key trade, investment and commodity policies in ensuring sustainable food security and alleviating poverty

Dol

lars

per

ton

Page 21: Pultry industry in north america

21

Inflation rates

Source: International Monetary Fund, World Economic Outlook 2008

-2

3

8

13

18

23

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

Canada China Japan Mexico United States

%

Page 22: Pultry industry in north america

22

A devalued U.S. dollar

Source: Factiva.

0.5

0.7

0.9

1.1

1.3

1.5

1.7

31-m

ay-0

8

31-m

ar-0

8

31-J

an-2

008

30-n

ov-0

7

30-s

ep-0

7

31-ju

l-07

31-m

ay-0

7

31-m

ar-0

7

31-J

an-2

007

30-n

ov-0

6

30-s

ep-0

6

31-ju

l-06

31-m

ay-0

6

31-m

ar-0

6

31-J

an-2

006

30-n

ov-0

5

30-s

ep-0

5

31-ju

l-05

31-m

ay-0

5

31-m

ar-0

5

31-J

an-2

005

30-n

ov-0

4

30-s

ep-0

4

31-ju

l-04

31-m

ay-0

4

31-m

ar-0

4

31-J

an-2

004

30-n

ov-0

3

30-s

ep-0

3

31-ju

l-03

Canadian Dollar Euro

Page 23: Pultry industry in north america

23

U.S. Dollar Exchange Rate

Source: Factiva.

0.08

0.09

0.1

0.11

0.12

0.13

0.14

0.15

31-m

ay-0

8

31-m

ar-0

8

31-J

an-2

008

30-n

ov-0

7

30-s

ep-0

7

31-ju

l-07

31-m

ay-0

7

31-m

ar-0

7

31-J

an-2

007

30-n

ov-0

6

30-s

ep-0

6

31-ju

l-06

31-m

ay-0

6

31-m

ar-0

6

31-J

an-2

006

30-n

ov-0

5

30-s

ep-0

5

31-ju

l-05

31-m

ay-0

5

31-m

ar-0

5

31-J

an-2

005

30-n

ov-0

4

30-s

ep-0

4

31-ju

l-04

31-m

ay-0

4

31-m

ar-0

4

31-J

an-2

004

30-n

ov-0

3

30-s

ep-0

3

31-ju

l-03

Yuan Mexican peso

Page 24: Pultry industry in north america

24

US total exports: sorghum

*/ Export volume data for HTS 100700, Grain Sorghum

Source: Department of Commerce, U.S. Census Bureau, Foreign Trade Statistics

4,000,000

4,500,000

5,000,000

5,500,000

6,000,000

6,500,000

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

Volume, MT

Page 25: Pultry industry in north america

25

US export growth: sorghum

*/ Export volume data for HTS 100700, Grain Sorghum

Source: Department of Commerce, U.S. Census Bureau, Foreign Trade Statistics

-40%

-30%

-20%

-10%

0%

10%

20%

30%

1999 2000 2001 2002 2003 2004 2005 2006 2007

Total Mexico

Annual growth

Page 26: Pultry industry in north america

26

US exports by market: sorghum

*/ 2007 country ranking. Export volume data for HTS 100700, Grain Sorghum

Source: Department of Commerce, U.S. Census Bureau, Foreign Trade Statistics

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

1- Mexico

2- Spain

3- Japan

4- France

5- Netherlands

US Top Export Markets(Volume MT)

Page 27: Pultry industry in north america

27

US total exports: corn

*/ Export volume data for HTS 100590, Corn

Source: Department of Commerce, U.S. Census Bureau, Foreign Trade Statistics

Volume, MT

35,000,000

40,000,000

45,000,000

50,000,000

55,000,000

60,000,000

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

Page 28: Pultry industry in north america

28

US export growth: corn

*/ Export volume data for HTS 100590, Corn

Source: Department of Commerce, U.S. Census Bureau, Foreign Trade Statistics

Annual growth

-10%

-5%

0%

5%

10%

15%

20%

25%

30%

35%

1999 2000 2001 2002 2003 2004 2005 2006 2007

Total Japan Mexico

Page 29: Pultry industry in north america

29

US exports by market: corn

*/ 2007 country ranking. Export volume data for HTS 100590, Corn

Source: Department of Commerce, U.S. Census Bureau, Foreign Trade Statistics

US Top Export Markets(Volume MT)

0%

5%

10%

15%

20%

25%

30%

35%

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

1- Japan

2- Mexico

3- Republic ofKorea

4- Taiwan

5- Egypt

Page 30: Pultry industry in north america

30

US total exports: soybeans

17,500,000

19,500,000

21,500,000

23,500,000

25,500,000

27,500,000

29,500,000

31,500,000

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

Volume, MT

*/ Export volume data for HTS 120100, Soy Beans

Source: Department of Commerce, U.S. Census Bureau, Foreign Trade Statistics

Page 31: Pultry industry in north america

31

US export growth: soybeans

-50%

0%

50%

100%

150%

200%

1999 2000 2001 2002 2003 2004 2005 2006 2007

Total China Mexico

*/ Export volume data for HTS 120100, Soy Beans

Source: Department of Commerce, U.S. Census Bureau, Foreign Trade Statistics

Annual growth

Page 32: Pultry industry in north america

32

US exports by market: soybeans

0%

5%

10%

15%

20%

25%

30%

35%

40%

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

1- China

2- Mexico

3- Japan

4- Taiwan

5- Indonesia

US Top Export Markets(Volume, MT)

*/ 2007 country ranking. Export volume data for HTS 120100, Soy Beans

Source: Department of Commerce, U.S. Census Bureau, Foreign Trade Statistics

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50,000

70,000

90,000

110,000

130,000

150,000

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

US total exports: live poultry

Value, thousand dollars

*/ Export volume data for HTS 0105, live poultry

Source: Department of Commerce, U.S. Census Bureau, Foreign Trade Statistics

Page 34: Pultry industry in north america

34

0%

5%

10%

15%

20%

25%

30%

35%

40%

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

1- Canada

2- Mexico

3- China

4- Thailand

5- Brazil

US exports by market: live poultry

US Top Export Markets(Value, thousand dollars)

*/ Export volume data for HTS 0105, Live Poultry

Source: Department of Commerce, U.S. Census Bureau, Foreign Trade Statistics

Page 35: Pultry industry in north america

35

1,000,000

1,500,000

2,000,000

2,500,000

3,000,000

3,500,000

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

US total exports: poultry meat

Value, thousand dollars

*/ Export volume data for HTS 0207, Poultry Meat

Source: Department of Commerce, U.S. Census Bureau, Foreign Trade Statistics

Page 36: Pultry industry in north america

36

US exports by market: poultry meat

US Top Export Markets(Value, thousand dollars)

0%

5%

10%

15%

20%

25%

30%

35%

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

1- Russia

3- Mexico

5- Hong Kong

4 Canada

2- China

*/ Export volume data for HTS 0207, meat poultry poultry

Source: Department of Commerce, U.S. Census Bureau, Foreign Trade Statistics

Page 37: Pultry industry in north america

37

North American integration

Integrated grain market

Integrated sanitary region

Integrated labor market

Integrated consumer market

Integrated export market

Thank you Obama, thank you Hillary

Need to develop an agenda

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38

An agenda for North American integration

Health care

Education and training

Nafta visas

Mutual recognition

Land grant universities

Bicentennial Scholarship fund

Page 39: Pultry industry in north america

39

An agenda for North American integration

Joint sanitary control programs

Services

Transport (all modes)

Infrastructure

Joint exports

Promotion

Cummulation