PARTICIPATION IN ALLIANCES AND CONTRACTS

1
PARTICIPATION IN ALLIANCES AND CONTRACTS

• 15 of producers surveyed currently market at
  least a portion of their calves through an
  alliance or coop. Number of calves marketed by
  participants is increasing at an average annual
  rate of 11.
• 65 of alliances returned carcass or performance
  data, 46 required or recommended certain
  genetics, 18 would supply specific bull
  genetics, and 10 would supply female genetics.
• 55 of producers surveyed indicated they would
  agree to long-term contracts (3-5 yrs.) to market
  calves to a specific feedlot or alliance,
  depending upon the price level at which they
  would agree.
• SOURCE Cattle-Fax

2
KEYS TO SUCCESS IN THE SEEDSTOCK BUSINESS

• Find the money to get started and survive during
  the first difficult years.
• Know where your expertise lies and then put it to
  use.
• Seek out and listen to the most successful people
  in the business and never stop learning.
• As you grow, hire the best people available. The
  cattle business has only three significant
  assetscattle, people and land.
• Get out of the way of your ego! Listen to your
  customers, your partners, and your employees.
  Also, study your competitors.
• SOURCE Seedstock Digest (anonymous producer).

3
SUPERMARKET TRENDS

• A study by FMI revealed the following
• Fast-food chains have given back to supermarkets
  some of the market share gains they won in recent
  years.
• Percent of consumers eating fast food once or
  more a week has fallen from 38 to 32.
• Take-out and home delivery meals have also
  declined.
• When consumers select a supermarket, their
  priorities are 1) cleanliness 2) produce
  quality 3-tie) meat quality and price.
• SOURCE Food Marketing Institute.

4
MAJOR FORCES DRIVING THE PROGRESSION TO
CASE-READY PRODUCTS

• 1st Labor savings.
• 2nd Out-of-stock and shrink in the meat case.
• 3rd Convenience and consumer satisfaction.
• 4th Food safety.
• SOURCE Dan Murphy, Meat Marketing and
  Technology

5
LARGEST GROCERY RETAILERS IN THE U.S.

• Percent of total supermarket sales
• Top 3 control 31.2 of sales.
• Top 5 control 42.1 of sales.
• Top 10 control 62.0 of sales.
• Top 20 control 76.3 of sales.
• SOURCE FMI (2001 sales).

6
TOP TEN GROCERY RETAILERS IN U.S.

• No. Sales Market
• Company stores
  (billion ) share
• Kroger 3,211 50.7
  12.8
• Albertsons 2,573 38.3
  9.7
• Safeway 1,762
  34.3 8.7
• Ahold USA 1,446 34.3
  8.7
• Wal-Mart Supercenters 1,060 20.1
  5.1
• TOTAL TOP 5 10,052
  166.6 42.1
• Sams Club 498 18.4
  4.6
• Costco 363 17.7
  4.5
• Delhaize America 1,406 15.2
  3.8
• Publix 675 14.7
  3.7
• Winn-Dixie 1,150 12.9
  3.3
• TOTAL TOP 10 14,204
  245.5 62.0
• SOURCE FMI (2001 sales).

7
DEVELOPMENT OF ANIMAL WELFARE STANDARDS

• The nations two largest supermarket companies,
  Kroger and Albertsons, have announced their
  support of standards being developed by FMI (Food
  Marketing Institute) and NCCR (National Council
  of Chain Restaurants).
• The FMI-NCCR standards are not mandatory but are
  expected of their supermarket and restaurant
  members, respectively.
• To date, the following restaurant companies have
  developed separate animal husbandry/welfare
  standards to be required of their suppliers
• -McDonalds
• -Burger King
• -Wendys
• -Applebees
• SOURCE Rod Smith, Feedstuffs, 7/8/02.

8
NUTRIENT CONTENT OF LEAN BEEF

• A 3-oz. serving of lean beef contributes only 9
  of the calories to an average 2000-calorie diet.
• Conversely, it supplies more than 10 of the
  recommended daily allowances for
• -Protein.................................
  .... 50
• -Zinc.. 39
• -Vitamin B12. 37
• -Selenium.... 24
• -Phosphorus.. 20
• -Niacin.. 18
• -Vitamin B6.................................
  ..... 16
• -Iron... 14
• -Riboflavin....... 12
• SOURCE USDA and NCBA.

9
AQUACULTURE IS GROWING AT A RAPID PACE

• Globally, fish is the most important single
  source of high-quality protein, providing 16 of
  the worlds animal protein consumption. And
  demand is increasing.
• Because growing numbers of fish species are being
  harvested into extinction, aquaculture will
  become one of the largest food-producing
  industries in the world within 10 years.
• Today farmed seafood makes up about a third of
  U.S. seafood consumption, and is increasing
  rapidly.
• Virtually all catfish and trout eaten around the
  world now come from farms, as do two-thirds of
  the shrimp.
• SOURCE FAO

10
U.S. IMPORTS OF GOODS (2001)

• Item Billions
• Food, feeds beverages 46.7
• Petroleum products 103.8
• Industrial supplies, except petroleum
  products 167.2
• Automotive vehicles, engines parts 189.7
• Consumer goods, except automotive 283.7
• Capital goods, except automotive 298.8
• Computers, peripherals parts 74.4
• Civilian aircraft, engines parts 31.3
• Other capital goods 193.1
• SOURCE U.S. Dept. of Commerce.

11
TOP TEN ANIMAL HEALTH COMPANIES (2001)

• 2001 Sales
• Company (million )
• Merial 1,636
• Pfizer 1,022
• Intervet 956
• Bayer 930
• Fort Dodge 776
• Schering-Plough 694
• Elanco
  686
• Novartis 550
• Pharmacia 469
• Idexx 386
• SOURCE Fountain Agricounsel.