CATTLEMAN’S CONFERENCEMarch 2010

Ferdi Meyer 1

Overview of Presentation

• Feed and beef market fundamentals– World market– Domestic market

• Profitability indicators of SA beef sector

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World Market – Fuel

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1002004

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US $/barrel Persian Gulf: F.O.B. Imported Crude Oil

US$/gallon World ethanol price (BRA anhydrous)

World biodiesel price Central Europe)

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$ / b

bl

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$ / g

allo

n

World Ethanol and Oil prices

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World Cereal Price Projections

Source: BFAP projections

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2000 2002 2004 2006 2008 2010 2012 2014

US

$ /t

on

Maize Gulf, FOB Wheat HRW, FOB

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World Oilseed Price Projections

Source: BFAP projections

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2000 2002 2004 2006 2008 2010 2012 2014

US

$/to

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Sunflower seed, CIF Rhine Soye bean seed, CIF Rott

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US Production

0.7% decrease from 2009

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…continues to decline

World Production

US Consumption

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0.3% decrease from 2009

Production decreases:• Argentina (13 percent)• China (4 percent)• United States (2 percent).

Production increases (but will not offset decreases):

• Brazil (4 percent)• India (5 percent) ………will continue declining, but at a slower rate of

less than one percent

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World Production

Forecasts (decreases):

Argentina: • production decrease 13 percent (tighter cattle

inventories)

• begin 2010 with a herd 10 percent lower than just two years ago

• drought, persisting = primary driver of herd reduction

– fewer weaned calves, a smaller herd and a reduction of cows for slaughter = limit supplies

United States: • production to decline nearly 2 percent

• cattle herd has been contracting since 2007

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Forecasts (decreases):

China:• continuing contraction of the cattle herd

• beef production will fall to just over 5.5 million tons

• backyard producers discouraged by a marketing system disadvantageous to small producers

• despite high cattle prices, production costs have risen at a faster rate, squeezing profit margins

• uncertainty - outbreaks of foot and mouth disease (FMD)

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Forecasts (increases):

Brazil: • production is forecast to rise 4 percent• herd continues to expand and is forecast to reach 185.2

million head by 2010• increased availability of slaughter cattle will not meet

strong demand for exports, which accounts for the bulk of the increase, but also satisfy solid domestic demand

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Forecasts (increases):

India: • production to rise 5 percent• primarily driven by strong domestic demand• firm demand for exports will also bolster

production

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US Cattle Prices will improve…

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Dol

lars

per

cw

t

NE Direct Fed Steer

OK City Feeder Steer

US Pork Price Trends

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Re

turn

s

SA OUTLOOK

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Real Per Capita GDP Growth

0.0

1.0

2.0

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4.0

5.0

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7.0

2000 2002 2004 2006 2008 2010 2012 2014

% C

hang

e

Baseline 2008 Baseline 2009 Update 2010

Exchange Rate

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SA White Maize Record Harvest

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6745

7190

7781

6000

6500

7000

7500

8000

1981 2008 2010

Thou

sand

tons

SA Maize Market

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YMZ SafexWMZ Safex

SA Oilseed Market

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2002 2004 2006 2008 2010 2012 2014

R/to

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Sunfl SAFEX Soya SAFEX

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SA Beef Market

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Ave Auction Price

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Meat Consumptions Growth

20%8% 7% 1%

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Chicken as a substitute

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Chicken Production

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2100

2002 2004 2006 2008 2010 2012 2014

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Rat

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Chicken production Chicken consumption Chicken:maize ratio

SA Calf and Beef Prices

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Ratio

Industry Profitability

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0

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2002 2004 2006 2008 2010 2012 2014

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Beef: maize price ratio Calf: maize price ratio

Real Beef and Maize Prices

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1997 1999 2001 2003 2005 2007 2009 2011 2013 2015

Bee

f c/k

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Mai

ze R

/ton

Real Beef price Real maize price

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BASELINE IN AUGUST 2010