International Markets Update

2008: A Record Setting Year (million $) Exports were up to all leading markets Year-to-year exports up 28% by volume, 38% by value 2008 value reached $3.6 billion, 94% of the 2003 level Exports represented 11.6% of production Source: USDA/USMEF Forecast, Million USD, includes variety meats

2009: A More Challenging Environment Forecast: Small year-to-year decline in exports Exports to Mexico and Canada will be below 2008 levels Korea, Japan, and Greater China will be the keys to the final results Long path to economic recovery in most countries, but weakening of the dollar against the peso, won, Euro, and ruble improves our competitive position

2009 Program Shifts Develop news sales channels, including caterers and suppliers to CVS chains Intensify efforts to move value cuts Expand sales force training Focus on displacing share from competing countries

Japan: CVS & Bento Chains Cuts: Short Plate, Brisket, Chuck Eye Roll 7-11 buying 80-100 MT per month for bento type items Moved about 220 MT during a promotion with a bento chain last summer

Taiwan: Value Cut Seminars Under the current economic climate, 5-star hotels tried offering price discounts, but also with smaller portions – consumers did not react well to this. Since consumers are becoming more accustomed to seeing a wider variety of U.S. beef cuts in retail outlets, USMEF organized seminars to high-end foodservice operators how to incorporate these cuts into their dishes so that they can still offer full-sized portions and meet their profitability requirements. U.S. beef cutting demonstration at Grand Hi-Lai Hotel in Kaohsiung, the most active player in the hospitality business in southern Taiwan: The Meat Department Director of Breeze Center's high-end supermarket demonstrated his professional cutting skills, merchandising techniques and cost management strategies to thirty-three chefs, buyers, and marketing personnel from fourteen restaurants, introducing beef cuts rarely utilized in five-star hotels, including chuck eye roll, chuck flat ribs, chuck flap and chuck short ribs. Grand Formosa Regent Taipei Promotion The Grand Formosa Regent Taipei, ranking first in U.S. beef purchasing among five-star hotels, featured U.S. Prime chuck eye roll on USMEF’s recommendation as the main ingredient in their aggressive sukiyaki promotion from mid-March to mid-April. The reasonable price and high quality U.S. beef made the promotion highly successful, generating more than an 800% increase in sales volume and over 100 internet blogs commending the restaurants for the dining experience. Because of these positive results, Grand Formosa Regent decided to extend the promotion and is planning to include U.S. chuck eye roll and chuck short ribs onto their permanent menu. In addition, the achievement has raised other five-star hotels’ interest in using U.S. chuck eye roll and some of them recently contacted USMEF for suggestions on alternative beef cuts and foodservice marketing.

Mexico: Sales Force Training 2-day seminars with ITESM in Monterrey, and now in Mexico City (new): The first day focuses on technical meat topics, proper handling, and a hands-on cutting session. The second day focuses on merchandising, negotiation, and U.S. beef sales strategies.

Korea: Consumer Communications The main copy is 'It is not different' and sub copies emphasize that the cowboy's devotion to caring for cattle is not different from Korean farmers, the corn fed to cattle is not different from the corn that U.S. ranch kids eat, and the quality of beef exported to Korea is not different from the beef that ranch families consume. The final tag-line is “Raised in the clean nature, managed by science - U.S. Beef.” The series of ads will be placed in lifestyle, cooking, and women’s magazines as well as in two major newspapers starting in July. An advertisement with a similar concept will be placed in trade magazines as well. The advertisement production crews visited the Massey Ranch in Grand Junction, CO and the Triple J Ranch in Chickasha, OK in early June.  USMEF Korea is also planning to create some stories about these two ranch families and post them in magazines and Beef Story, consumer Web site. It’s Not Different. The beef served at my family's table is not different from the beef served at the world's table.