COPYRIGHT: NO ONWARD TRANSMISSION OR REPRODUCTION IS PERMITTED WITHOUT THE EXPRESS PERMISSION OF THE EDITOR KEY STATISTICS ON THE GLOBAL PIG INDUSTRY

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1 ISSUE NO /12/1 2/10 PAGE:1 COPYRIGHT: NO ONWARD TRANSMISSION OR REPRODUCTION IS PERMITTED WITHOUT THE EXPRESS PERMISSION OF THE EDITOR Read the Editor's blog at Brief KEY STATISTICS ON THE GLOBAL PIG INDUSTRY 12 PAGE ISSUE! Dutch census - 1 Danish Crown & Tican - 2 Global Price Cycle - 3 Europe's prodn. costs - 4 Polish & Danish exports 6 Asian imports - 10 Price Monitor - 12 DATE: 06/12/10 ISSUE NUMBER: 191 Dutch herd & farmers decline, market pigs increase The April/May census for the Netherlands pig sector has now been finalised and released. It shows a small but surprising increase in the total number of pigs. The total number of all Dutch pigs increased by 5% as measured in the April/May census this year. This result was mainly driven by the increase in the number of piglets (+1.1%) to million head and fattening pigs. The number of all fattening pigs (more than 50 kg) went up from million head to million head (+1.2%). Pigs for fattening in the kg weight range drove most of this increase (+2.8%) to million head. All other categories showed declines except for the number of boars which remained unchanged and for the number of sows mated for the first time. The census confirms, however, that the previously observed trends of falling sow numbers and falling farmer numbers are continuing. The number of breeding sows dropped by 2.7% from million head to million head. Gilts mated showed an increase (+ 3.2%) to 128,000 head. But the number of gilts not yet mated fell back by 23% to 110,000 head. The total of breeding sows and boars and gilts declined by 3.9% in 2010 compared with The census also confirms the trend of concentration in pig farming that is occurring in the Netherlands. The key pig producing areas are Brabant, Gelderland, Limburg and Overijssel. These contain over 90% of all the pigs in the Netherlands. In all of these provinces the number of farms producing pigs has fallen in 2010 compared with The total number of pig farms in the Netherlands is now reported as 7,030 which is a 7% drop in twelve months. Source: CBS '000 total pigs 13,500 13,000 12,500 12,000 11,500 11,000 Netherlands pig census April/May 2010 ' 000 head Netherlands total pigs and breeding sows pigs '000 breeding herd 1, BH % changes 09/10 Piglets 5,123 5, Weaners (20-50kg) 1,963 1,971-4 Slaughter pigs >50kg 4,062 4,013-4 breeding sows and boars 1,105 1, Sows in pig Breeding sows not mated Newly served gilts Gilts Boars for breeding pigs 12,254 12, ,350 1,300 1,250 1,200 1,150 1,100 1,050 1,000 TERMS: DUPLICATION OR ONWARD TRANSMISSION IS FORBIDDEN AND ACTION WILL BE TAKEN AGAINST ANYONE FOUND IN BREACH OF COPYRIGHT. IF YOU RECEIVE AN ILLEGALLY COPIED VERSION PLEASE INFORM US IMMEDIATELY. TEXT MAY BE REPRODUCED WITH PRIOR PERMISSION AND AN ACKNOWLEDGEMENT. INFORMATION IS INTENDED AS A GENERAL GUIDE AND ALTHOUGH EVERY EFFORT HAS BEEN MADE TO ENSURE ACCURACY, LIABILITY CANNOT BE ACCEPTED FOR ANY ERRORS OF FACT OR OPINION. READERS ARE ADVISED TO SEEK PROFESSIONAL ADVICE ON INVESTMENT MATTERS

2 WORLD NEWS ISSUE NO /12/10 PAGE: 2 Growth in Danish packers' profits and farmers' bonus The 2009/10 annual results for the Danish Processors were released in November. Danish Crown and Tican have both reported growth in sales and profits and in the dividend (bonus) given to their farmer suppliers/members. The net profit Danish Crown for 2009/ 10 is DKK billion against DKK billion last year. That's an improvement of 7.3%. Turnover increased by 10% to DKK billion. Kjeld Johannesen, CEO of Danish Crown, admitted that "record earnings from the overseas operations of DC and sales on the global market, especially Russia and Asia, have been very important." He drew attention to the fact that financing costs have been very low but payroll costs are still too high. The Tican management also reported an increase in turnover of 8% with sales now passing DKK 4 billion. Good utilization of the plant at Thisted and solid profits in the processing companies has resulted in an operating profit increase for the year of 58%. Net profit has increased by 80% to DKK 157 million. "An increasing part of our earnings comes from processing activities abroad," said Ove Thejls, CEO of Tican. Danish Crown will pay out a total of DKK billion to its farmer suppliers. This is the highest level of bonus payments in Danish Crown's 20-year history. These dividends are equivalent to DKK 75 per kg for sow producers, DKK 95 for pork producers and DKK 1.25 for cattle producers. Tican is paying a dividend of DKK 1.00 per kg for pork producers (DKK 90 as the standard bonus + DKK10 as a bonus for owners). This is an increase of almost 50% on the 2009 dividend figure. These increased bonuses will be welcome as everyone seems to agree that Danish farmers are still under pressure. "The financial crisis is by no means over on the farms, and the money is badly needed," said Niels Mikkelsen, Chairman of Danish Crown's Board of Directors, " This year, Danish Crown is offering the highest prices to farmers, and this makes a big difference. Danish farmers are still under immense economic pressure, and that competitiveness remains absolutely key." DKK million 2009/ /09 Revenue 45,211 44,757 Profit from primary activities 1,857 1,730 Net profit for the year 1,648 1,164 Balance sheet total 22,153 21,306 Equity 4,639 3,940 Subordinated loans 5,636 4,940 Supplies from members, million kg Supplementary payments, DKK million 1,377 1,402 1, No of cooperative members 9,847 10,685 No of employees 23,085 23,500 Source: Danish Crown Danish Crown Annual Results Summary Tican Annual Results Summary Danish Crown of supplies and even Tican's Jutland territory was affected. Something had to give and higher prices through 2010 and these record year-end bonuses are reactions to these pressures. And Danish Crown's rationalisation and cost cutting are also relevant to their improved performance. But the CEOs of Danish Crown and Tican identify the same strategic issues. Danish farmers and packers are still under competitive pressure, environmental regulations are increasing their costs, and the opportunity (and salvation) for the Danish industry lies in value-added investments overseas. The recent announcement from Danish Crown of the intention of the co-operative to use a corporate structure to raise external finance probably means that we can expect to see that Danish packer go shopping abroad very soon. Currency rates 3 December Danish Kroner = US$ 180 = Euro 134 = 114 DKK million 2009/ /09 Revenue 4,001 3,705 Net profit for the year Balance sheet total 1,551 1,415 Equity No of cooperative members Last year both Danish packers were publicly concerned about payroll costs and the competition from German abattoirs. Danish No of employees 1,834 1,867 live pig exports were literally starving Source: Tican WHOLE HOG

3 WORLD NEWS ISSUE NO /12/10 PAGE: 3 Pig price cycle will push ahead if demand pulls No one wants to peak too early and it is with some relief that this month's price charts support the view expressed here some months ago that a new landmark was possible in the current upward phase of the global pig price cycle. That landmark is the price peak previously seen in the Spring of 2005 and it's a valid question as whether we are still on course to do that by early With production levels set in the short term and little flexibility in stocks in most major markets it all depends on demand. The US, Canadian and Danish markets are now moving pretty much in synchronization and all have been affected by the contractions in their domestic production. Export sales have recovered this year and prices have performed their function of balancing supply and demand in the upward phase of the pig price cycle. No major surprises there - although the hangover from the financial crisis has yet to find a long lasting cure. The patient seems to keep coming back for another does of medicine. If only the pig industry had been clever enough to invent financial derivatives that threatened the world's major economies. And to think that politicians used to complain about the behaviour of the Chicago Board of Trade pig futures contract. Wall Street bankers have shown those traders a trick or two. A recovery in consumer confidence is now held back by weekly reports that the end of the world is nigh and is made real in the form of a sovereign debt crisis. In the (simple) world of pig industry economics the facts are clear. Production levels have dropped and producers are in no mood to expand yet. The interaction of supply and demand has resulted in the normal pattern of price change over more than one production period. And although week to week price changes have been declining in the last 4-6 weeks it is still possible that the cycle's momentum will be enough to keep the price cycle moving up. Demand is a key variable in all of this. We can't see how global demand can fall back significantly this side of Christmas or even in Confidence is weak but blue chip companies are doing well and so are may of the Asian markets. It is in both these groups' interests to get the global recovery under way. It's no use having cash in the bank if investments can't be justified by demand or export factories can't operate. Worse, cash on the balance sheet means companies could be a takeover target. The reports from nonwestern markets suggest global growth will be positive in That must support the pig price cycle's direction Index 100 = 1August Mar-03 % Sep-03 Mar-04 Global Pig Price Cycle March October 2010 Sep-04 US price Danish price Mar-05 Sep-05 Mar-06 Canadian price "World price" Sep-06 Mar-07 Sep-07 Mar-08 Sep-08 Mar-09 Sep-09 Mar-10 Sep-10 Week to week % change in global pig price from 1 August /08/ /08/ /08/ /08/ /08/ /08/ /08/ /08/ /08/ /08/ /08/ /08/2010 Index 100 = 1 August US price Canadian price Danish price World price Global pig price cycle, /1/90 6/1/91 6/1/92 6/1/93 6/1/94 6/1/95 6/1/96 6/1/97 6/1/98 6/1/99 6/1/00 6/1/01 6/1/02 6/1/03 6/1/04 6/1/05 6/1/06 6/1/07 6/1/08 6/1/09 6/1/10 6/1/11

4 WORLD NEWS ISSUE NO /12/10 PAGE: 4 British producers improve but can do better The British Pig Executive (BPEX) has recently published its review of the costs of pig production in 2009 in selected countries. This is the ninth in a series of annual reports but the story remains largely the same. British producers were the beneficiaries of high prices and a favourable exchange rate (weak sterling against the Euro). There were improvements in technical efficiency but British producers remain at the bottom of the European league table when ranked on that key indicator, carcass meat produced/sow. Whilst the Brits have improved, so have others, and the relative improvement is less than what is needed to move the British industry's competitiveness in the right direction. The charts alongside illustrate three key parameters of performance with the UK taking bottom place in the league table. The Brits' average performance for pigs weaned per sow/year (22.3) is 2% below the EU average. In carcass weight production per sow/year the Brits lag 40% behind the Dutch who are producing 2.35 tonnes per sow/year - compared with the British 1.64 tonnes per sow/ year. The EU average is 2.06 tonnes per sow/ year. The Brits produce much lighter pigs than the rest of Europe and this partly explains this difference and this characteristic of the British market is an ongoing handicap. The Brits have been improving this aspect of their performance over the years and carcass meat/sow has increased by 14% since The BPEX report highlights other aspects of technical performance that are worrying for the Brits. Post weaning mortality has improved dramatically in Britain as the PCV2 vaccine has had an impact and the incidence of PMWS has declined. But post weaning mortality at 5.6% is still higher in 2009 than it was in 2000 (at 5.3%) and is above the EU average at 5.4%. The report admits that British producers have had a competitive advantage as sterling has depreciated significantly against the euro. The report also notes that imported inputs such as soya feed increase in cost (although this is a function of the sterling dollar exchange rate not the euro rate). When the report calculates the cash costs of production (excluding finance costs) it finds that the cash costs of production in Britain are 115.5p/kg and this is 5 pence lower than 2008 and 20 pence lower than However, it is 5 pence /kg higher than the EU average and this is the same gap that was recorded in The BPEX report, "2009 pig cost of production figures in selected countries" is available from info@bpex.org.uk for 160 hard copy. In this year's report Brazil has joined the BPEX Interpig group and Brazilian costs are presented in the international comparisons. Head Head Pigs weaned per sow/year, GB BEL GER SPA BRA IRE FR NL DEN EU Pigs finished per sow/year, GB IT SPA GER BEL BRA IRE FR NL DEN EU kg/sow Carcase meat production per sow/year GB SPA IRE BRA BEL GER DEN FR NL IT EU

5 EUROPEAN NEWS ISSUE NO /12/10 PAGE: 5 European prices move up across the board The early snows and freezing weather that have gripped Europe in late November have caused transport problems and economic disruption. No doubt the cold weather has increased the appetites of humans and animals alike. But throughout November there has been another phenomenon at work - an firming of the market and increase in the pig prices in almost every country that Whole Hog regularly reports on this page. The charts alongside make the point clearly. All the euro zone countries and all but four of the non-euro zone countries show year on year price increases for last month. Christmas seems to have come early for Europe's pig producers. In France, prices have moved up 8% in the last month compared with the same month last year. Irish prices have jumped 7% and Danish prices are up 8.4% from last year - and this does not take into account the recent record dividends announced at the end of November by the Danish processors. German prices have increased by 5% from last year and Dutch and Belgian prices are up 4.5% and 3.6% respectively. The Spaniards bring up the rear for the Euro zone brigade with an annual price increase for November of just 3.3%. Pig prices for Slovenia have increased year on year by 3.1%. However, Hungarian prices are showing no change on last year whilst the three other countries in this group - the UK, the Czech Republic and Poland - show price declines of 2.2%, 2.4% and 5.9% respectively. In all cases the pattern of reducing price falls each month is one which indicates that the market is firming. The EU average pig price is reported as Euros/100 kg. That's up 3.1%. With a seasonal demand shift locked in it's interesting to see that the European market is finally showing a robust recovery and across all member states. With feed prices also moving up this change in market sentiment is welcome but may not be enough to stimulate supplies for % % Annual % change in EU pig producer prices (in Euro) 8 *EU Average is constructed from % change i Euro and national currancies WHOLE HOG September September 2010 October October 2010 November November 2010 Belgium Denmark Germany Spain France Ireland Netherlands -5.8 Source: EUROSTAT Annual % change in EU pig producer prices (national currencies) UK Poland Hungary Czech Rep Slovenia EU Average September September 2010 October October 2010 November Novwmber 2010 *The UK price average for November has been calculated using only partial data because of reporting issues by the authorities

6 EUROPEAN NEWS ISSUE NO /12/10 PAGE: 6 Danish exporters are making gains in 2010 The Danish trade figures for the first seven months of 2010 appear to show that Danish exports are on track for a good year. Within the EU exports overall have fallen by 1.6% for the period with the large UK market showing a 6.3% decline (158,793 MT) and the Polish market falling by 4% (93,331 MT). The German market is up 6.5% though (214,076 MT). The Italian market is also up by almost 6% to 65,882 MT. intra EU exports were 632,383 MT. It's in the extrra-eu global market that the Danes are showing good form. These third country exports are up almost 14% according to the Jan-July Danish trade data which is remarkable given the challenges that the Euro's strength has brought. 334,737 MT of Danish pork has been sold in the period. The Japanese trade is up 3% (85,344 MT), Chinese and Russian sales are up 5.5% (72,763 MT) and 45% (63,531 MT) respectively, and the Australian export trade is up 5.4% (27,910 MT). Source: Danish Statistics Danish pigmeat exports Jan - Jul 2010 ( metric tonnes) % change on 2009 Japan 85,344 82, China 72,763 68, Hong Kong 21,095 16, Russia 63,531 43, Australia 27,910 26, USA 22,447 21, South Korea 7,004 7, Other third countries 34,642 27, third countries 334, , EU , , , , Danish pork exports at the seven month mark are up 3.3% on the same period in 2009 (967,119 MT) and augur well for the full year's results. Both danish Crown and Tican have reported very positively about company sales in overseas markets so it may well be that the Danes get the prize for the most growth in global export markets in 201 Polish pork export trade is one to watch The Polish pig industry is undergoing significant restructuring and the exodus of smaller producers is widely reported. Less obvious has been the performance of Polishbased companies in the export market. Whilst the export performance in 2009 was not remarkable and the Poles are not yet a major exporter, however, the figures for the first three quarters of 2010 show significant growth rates across various overseas markets. The trade data seem to back up what is being seen on the ground and in the factory in Poland, Polish processors now seem to be having the product and the quality to make a positive impression with foreign customers. The Ukrainian market is recovering - although not back to its historical levels yet - and Polish exporters are even making an impression on that most-difficult-to-please customer, the Japanese. A total of 167,742 MT of product was sold overseas by Polish exporters in the first three quarters of 201 A breakthrough into the (metric tonnes) Polish pigmeat exports Jan - Sep 2010 Jan-Sep 2010 Jan-Sep 2009 % change on 2009 Ukraine 24,899 26, Czech Republic 13,790 12, Germany 10,785 10,686 9 Lithuania 10,767 10, UK 3,870 5, Slovakia 9,826 8, Belarus 27,025 3, Japan 4,283 3, Others 62,497 31, , , Source : Polish Ministry of Agriculture Belarus market has produced a significant increase in exports there. The Czechs and the Lithuanians have discovered a taste for Polish sausages. And the collective category of "others" has almost doubled. Imports of pork products into Poland are still dominated by German and Danish companies which make up two thirds of all foreign imports. Belgian and Dutch sources take this proportion up to c. 85%. There has been a small decline in total imports (-3%) in the first nine months of WHOLE HOG

7 THE AMERICAS ISSUE NO /12/10 PAGE: 7 Canadian pork exports maintain their momentum The first nine months of 2010 have come to an end with 's pork exporters maintaining their export growth. sales are up 3.7% for the first three quarters of the year. Live hog exports are still markedly down on the YTD figures (which go through to 20 November) but the weekly percentage changes for feeder pig exports to the USA are now minimal. In fact, they are up 1% in the most recent weekly data that is reported. In total, 814,888 MT of Canadian pork were sold overseas in the January-September period of 201 The achievement is not spectacular but it is a solid effort in the face of very difficult market conditions in the global export market and significant tensions in the domestic supply chain. Whole Hog's previous forecast that the Canadians will be the export winners in 2010 seems set to be realized with one quarter left to run. Individual markets performed differently: the Japanese market was up 5.7% with 176,319 MT sold YTD. Mexico was also up, 66% to 49,713 MT; Mainland China was up c. 16% to 26,208 MT; Russian buyers purchased 64,245 MT or 36% more than in the same period last year; the USA market was up 4.4% to 250,683 MT; the Philippines received 38,035 MT and were up 19%. In contrast, the Australian market dropped back by 16% to 33,163 MT YTD and Hong Kong dropped by 5.3% to 48,986 MT. The table alongside provides the details. The net position for the first nine months of 2010 is a positive one. YTD feeder pig exports to 20 November are million pigs (-11.5%0 and YTD numbers for barrows/gilts and sows are million head (-9.5%). Feeder pig exports are now flatlining. Canadian slaughter figures are down 2.6% for the YTD week ending 20 November 201 Canadian pigmeat imports in the year to date ending 13 November were 121,811 MT in total and this is c. 5% up on the same period last year. Fresh and frozen pigmeat imports from the USA were 83,409 MT, and this is a 5% increase on a year to year comparison. Imports of processed pigmeat from the USA were up by around 15% in the YTD and were recorded at 37,697 MT. Pigmeat imports from the US make up over 99% of total Canadian imports. 300, , , , ,000 50,000 01/01/03 Canadian pork exports, year to 30 September, 2010 ( metric tonnes) Source: Statistics % change on 2009 USA 250, , Japan 176, , Australia 33,163 39, Russia 64,245 47, Mexico 49,713 30, S. Korea 38,806 47, China 26,208 22, Taiwan 22,324 27, Cuba 2,677 3, New Zealand 7,300 9, Hong Kong 48,986 51, Philippines 38,035 31, Others 56,429 67, , , head 01/07/03 hog number 01/01/04 Canadian weekly live hog exports to US, actual and moving average /07/04 52 week moving average 01/01/05 01/07/05 01/01/06 01/07/06 01/01/07 01/07/07 01/01/08 01/07/08 01/01/09 01/07/09 01/01/10 01/07/10 01/01/11

8 THE AMERICAS ISSUE NO /12/10 PAGE 8 US exports stumble along with only Q4 left Recent data from USDA indicate that the USA's total pork exports increased by 2.2% in the first three quarters of 2010 (up to million MT). However, the September 2010 total was down 3.1% from the September 2009 figure. Sales of pork cuts and variety meats in the month of September were 145,089 MT. Within this total fresh, chilled exports in September 2010 were 39,561 MT and are up 12% down compared with September Frozen exports were 52,531MT in September and this was 6.5% down on September last year. Pork variety meats were recorded at 36,455 MT in September and this is an increase of 18.7% on September last year. YTD exports of variety meats from the USA were slightly less than the same period in 2009 and were 316,128 MT. The figures in the table illustrate what has happened in the various overseas markets. pigmeat exports for the first nine months of the year were 1,364,331 MT. Exports to Japan in Jan-September 2010 were relatively stable and were 1.4% up. But in South Korea sales fell by almost 18%. Japan imported 322,920 MT of US pigmeat in the YTD period. In contrast, 64,124 MT of pork were exported to South Korea in the same period of 201 US exporters succeeded in increasing pork exports to Mexico (+6.7% for the YTD and 384,685 MT) and (+9.8% YTD and 134,292 MT). For that other big market, Hong Kong US exports were unchanged (0% YTD and 130,551MT). Mainland China ports/markets saw an increase of 52% (metric tonnes) Source: US FAS US pigmeat exports, September 2010 Pork cuts Variety meats (50,284 MT).The various other markets that are reported together in the data were up 22% (195,192 MT). September pork imports to the USA were 33,848 MT and this is a 13% increase on last year. YTD US imports of pigmeat in Jan-September 2010 were reported at 274,166 MT - an increase of 5.2% on the same period last year. Fresh and chilled pigmeat imports were c. 21% higher than in September to 21,742 MT. Frozen pork imports were up c. 11% - to 7,536 MT in September. YTD 2010 YTD YTD pigmeat imports from were 227,639 MT - a 5.9% increase on the YTD September 2009 figure. Denmark exported 25,775 MT of pigmeat to the US in the YTD September 2010 and this is 3.1% less than last year. The USMEF has made much of the opportunities for US exports of pork but as yet, and with only three months of the year left, it does not appear that US exporters have made the most of them. US pigmeat imports, September 2010 % Change Japan 28,449 3, , , Mexico 26,448 11, , , ,595 1, , , South Korea 2, ,124 77, China 9,084 9,844 50,284 33, Taiwan 2,006 1,197 23,662 31, Russia 8, ,620 99, Hong Kong 2,195 6, , ,560 0 Others 14,924 2, , , ,634 36,455 1,364,331 1,334, The next issue of Whole Hog Brief will be available on the 10th January 2010 ( metric tonnes) Pork YTD 2010 YTD 2009 % Change 28, , , Denmark 2,581 25,775 26, Others 2,435 20,752 19, , , , Source: US FAS

9 AUSTRALASIA & EMERGING ECONOMIES ISSUE NO /12/10 PAGE: 9 Turnaround for balance of trade in Australia The Australian trade data for September 2010 appear to show that the trade gap is back on trend i.e. export volumes are up and import volumes are down in the latest monthly data. Cumulative imports increased by 3.6% on the MAT trend from September last year and exports fell by 2.8%. However, the year to year September data comparisons show a 14.5% decrease in import volumes and total export volumes year on year show a 19.7% increase. In September 2010 Australia exported 3,483 tonnes (Shipped Weight) of pigmeat. This was worth A$14 million. That's almost 20% more in value terms than September The trend in total volume was 36,032 tonnes. The Moving Average for the value of these exports was reported as A$117.9 million, which is a 12.6% fall on the 2009 total. The average price in September was A$2.98/kg, a 14% drop over the year. The trend line of slaughter pigs is showing another increase - by 3.1%. The monthly slaughterings numbers have also moved up (+4.9%) and slaughter weights are up 6%, Pigmeat production is up year on year in the latest numbers. The domestic production level in September was 30,002 tonnes, up 6.6%. Export volumes to the Singapore market have risen slightly (+1%) in comparison with last year and are c. 11.3% down on the MAT trend. The sales value of exports to the Singapore market has declined by c. 4% compared with the same month last year but the MAT trend is down by 13%. Singapore is reported to be 39.3% of the Australian export market in September. The September trade with New Zealand was up by 9.3% and sales to Hong Kong were up 2.6%.The relatively small Japanese trade was up 61%. Singapore, New Zealand and Hong Kong are the major destinations for Australian pigmeat and made up c. 69.6% of Australia's total exports for September 201 Imports of pigmeat into Australia in September were 11,160 tonnes which is a 14.5% decrease on September The trend in import volumes went up by c. 4% and was reported at 141,045 tonnes. The MAT trend in value was A$ million, a 12% drop year on year. The September import bill for pigmeat was A$48 million. exported 3,122 tonnes of pigmeat to Australia in September 201 This is a 17% decrease on the same month a year ago. The 12 month trend in import volumes from is reported at 42,174 tonnes, a 14% decrease on the 12 months since September 2009 while the trend in value fell by 24.3% and totalled A$126.1 million. supplied 28% of total import volumes in September. Exports from Denmark to Australia increased again in September this year. Denmark exported 4,220 tonnes of pigmeat to Australia in September and this is an increase of 17% from September The Source : ABS Australian pigmeat exports September 2010 Australian pigmeat imports September 2010 Source : ABS trend in Danish import volumes is recorded at 47,767 tonnes and this is up by 11.8% while the trend in total value fell by c. 14.5% and equalled A$184.5 million. Denmark was the source of 37.8% of total monthly import volumes in September. US exports to Australia in September 2010 fell significantly with 3,736 tonnes imported by Australian buyers, equivalent to a 13% increase. The trend in total volume was 50,150 tonnes which is a 15% decrease on September The trend in total value is reported at A$148.7 million and this is about 2% more than the trend value for last year. Imports from the USA were 33.5% of total imports in September. Singapore New Zealand Hong Kong MAT September , , , , MAT September , , , , % change September -10 3, , September -09 2, , % change Australian pigmeat exports/imports MAT in volume Exports tonnes Imports tonnes 56, ,000 51,000 46,000 41,000 36,000 31,000 Exports MAT Imports MAT 26,000 Feb-07 Jun-07 Oct-07 Feb-08 Jun-08 Oct-08 Feb-09 Jun-09 Oct-09 Feb-10 Jun-10 Denmark USA 140, , , , ,000 90,000 80,000 70,000 MAT September , , , , MAT September , , , , % Change September , , , , September , , , , % Change

10 ASIA & EMERGING ECONOMIES ISSUE NO /12/10 PAGE: 10 All suppliers see solid sales growth in Japan The August 2010 trade data for Japan show solid growth in the eight month period until the end of August. The data show that Danish and US exporters are now advancing in this market - although they are still well behind Canadians in the growth stakes. Overall, the Japanese market is up 7.7% in volume terms at the two thirds mark in 201 Exports to Japan increased to 520,126 MT compared with 482,811 MT in the same period the year before. Frozen pigmeat was up by 15.4% and fresh & chilled declined by 7.5%. As noted previously in Whole Hog, the sales trends of the different exporters indicate that the US export drive is making a difference in Japan. The Danes increased their exports to Japan in the first eight months of 2010 by 4.7%: 92,492 MT this year against 88,372 MT in the same period last year. The Canadians increased their YTD sales by 13.3% and the volumes for January-August 2010 were 126,344 MT. The USA, Japan's #1 supplier, saw an increase of 3.4% in its sales Jan-August compared with last year. sales from the USA amounted to 207,591 MT compared with 200,835 MT in the same period a year earlier. Japan's pigmeat imports, August 2010 ( metric tonnes) August 2010 YTD 2010 YTD 2009 Source: Japan's Agriculture & Livestock Industries Corporation Pigmeat imports from the USA were 24,466 MT in August, a 17% increase when compared with August Canadian exports in August 2010 to the Japanese market were 12% higher than in August ,292 MT of pigmeat to Japan were imported from during August 201 In the same month Japan imported 13,670 MT of pigmeat from Denmark. This is up 32% from August stocks increased. At the end of August Japan's pork stocks were 207,917 MT. This is a jump of almost 9% compared with a YTD % change Fresh & chilled pigmeat 18, , , Frozen pigmeat 48, , , US 24, , , Denmark 13,670 92,492 88, , , , Pigmeat 66, , , year ago. Imported pork stocks equaled 175,184 MT - an increase of 7.5% on the same month in Domestic pork stocks are 32,733 MT, c. 15% higher than last year. pork sales in Japan in August were up by 2.6% on the same month last year (133,905 MT). The sales of imported pigmeat were 65,963 MT - and this is about 7% higher than at this time last year. Domestic pigmeat sales fell by c. 1.3% on last year's figures and were recorded at 67,942 MT. South Korean imports fall again - even Chileans decline The September trade figures for South Korea confirm the previous month's report: imports from all suppliers except Chile are down. And even Chilean-sourced pork has only just managed to show growth year on year. Overall, there has been a volume decline of 2.5% for the nine month period ending in September 201 In that month South Korea imported 20,261 MT of pigmeat - that's 32.5% less than September US exports in September 2010 were 14.3% less than the same month in Canadian exports declined by 9.6% in the year to year monthly comparison. Exports from Chile fell by 13.6% on a year to year comparison. Looking at the YTD figures shows a similar picture: the USA, the market leader with 57,726 MT YTD and 27% market share, saw its exports fall by 14.3% on a YTD basis; Canadian exporters exported 40,985 MT to South Korea YTD and this was down 3.9% on the YTD As noted earlier, YTD South Korea's pigmeat imports, September 2010 (metric tonnes) Source: Korea International Trade Association sales of pork from Chile were up 6% to 32,198 MT. European-sourced exports to South Korea have fallen from all countries. YTD Danish exports declined by c. 12% (to 6,273 MT), Spanish exports fell by c. 7% (to 13,661 MT), and French sourced imports dropped by c. 8% (to 10,361MT). Sep 2010 YTD 2010 YTD 2009 % Change United States 4,627 57,726 67, ,512 40,985 42, Chile 3,694 32,198 31,991 6 Denmark 718 6,273 7, Spain ,661 14, France ,361 11, , , , The recent news of out breaks of foot and mouth disease in South Korea could well yet alter the market outlook for imports into South Korea but as of now, with one quarter sales left, it would seem that the market will have a negative outcome over the full year.

11 NEWS IN SHORT ISSUE NO /12/10 PAGE: 11 News in short...news in short...news Germany Pig slaughtering in Germany is going to break a new record in 2010 according to the German Statistical Office (Destatis). Between June and September more than 14.6 million pigs were slaughtered in the commercial slaughterhouses of Germany. This is a 5.6% (774,000 head) increase on the same period in Until the end of September there were 43.2 million pigs killed in Germany, which is 1.7 million more than in the previous year. This increase is due to the rise in slaughtering of imported live pigs. In Q3 the number increased by 163,200 head or 14.1% when compared to the same period last year when the trend was going downwards. As a result of the increased slaughter numbers, production rose too. In July - September 2010 production increased by 5.5% (71,300 tonnes) to 1.36 million tonnes. In Q3 of 2010, just under 2 million tonnes of meat were produced from commercial slaughtering in Germany, 4.2% more than in the same quarter a year earlier. The production of poultry meat is also on the rise, while the production of beef is declining. Russia London listed Cherkizovo Group has just released its interim results for Q1-Q3 201 Its results sales up 20% to US$877.7 million from US$731 million. The gross profit has increased 16% to US$235.9 million from US$202.5 million. Net income was up 26% to US$104.4 million. The Group's CEO Sergey Mikhailov claimed that, "We are now witnessing a slight oversupply of meat in the market, as less efficient producers and individual households are slaughtering livestock due to grain shortage. Combined with an increased share of poultry imports in the second half of this year, this puts a downward pressure on selling prices, especially for poultry sales. This may continue into the beginning of 2011, as producers will accumulate stocks. We welcome the Government's recent announcement to decrease import quotas for However, with the anticipated growth in domestic production, the market is expected to reach self-sufficiently levels towards the end of 2011 and further quota reductions may be required." FAO FAO has released a presentation which indicates that intensification of livestock production can make a huge contribution to mitigating climate change. The author, Henning Steinfeld, is a Senior Livestock Policy Officer and his presentaion identifies the contribution of livestock to climate change and the "quick wins". As he puts it, "the long shadow" is not inevitable but the result of long-standing neglect; reduction in consumption may be part fo the answer for the affluent consumers but "the mitigation potential of technical and structural options is very large and will requires technological change and re-alignment of incentives". He sums up by saying "intensification is key to mitigation". The Canadians are continuing their fight against US COOL arrangements for hogs and cattle at the WTO Dispute Settlement Panel in Geneva. has complained that the protectionist nature of the US COOL rules has disctriminated against Canadian exports of feeder and slaughter hogs to the direct benefit of US competitors. Canadian hogs producers were represented by Martin Rice, Executive Director of the Canadian Pork Council; Andrew Dickson, General Manager of Manitoba Pork; and Patrick O'Neil, Ontario Pork's Trade Strategist. They were supported by CPC International Trade Counsel, Peter Clark. Dickson noted "on balance, the third country intervenors supported the proposition that COOL was not WTO consistent." He explained, "Live exports are essential to the health of the Canadian hog industry. For Manitoba, they are essential. I am encouraged by the Canadian team's performance. We expect a speedy favourable finding and that we can get the border back to normal soon."clark noted that, "We should have a decision by summer. This dispute has broad implications - the EU is developing a new very extensive regime. If the panel does not clearly condemn the protectionist abuses of the US COOL measures, Country of Origin Labelling could become one of the new nontariff measures of choice." Romania In January-July 2010 Romania imported 101,980 tonnes of pigmeat, which is 15% less than in the same period in Poultry and beef meat imports were three times lower than last year and amounted to 52,710 tonnes and 7,100 tonnes respectively. Romanian pigmeat exports are small at the moment but poultry exports grew rapidly in the last few months, mainly to Bulgaria and Hungary. Ukraine in January-September 2010 Ukraine imported 268,000 tonnes of meat and by-products, according to the Ukraine's Customs Service. This is 17% less on the same period last year. At the same time meat exports increased by 57% to 37,000 tonnes. The main source of meat exported to Ukraine is the USA with nearly one third of the total imports, followed by Poland with 21%, Brazil - 12% and Germany - 11%. China Zhongpin has made various forecasts on the outlook for the pork market in China. According to Zhongpin hog prices have increased about 30%, mainly due to government purchases to stabilize hog prices and droughts and floods in parts of China. Zhongpin forecasts that hog prices will continue to increase by about 10% in Q4 201 Longer term the outlook for pork processing remains positive, according to Zhongpin and the the government targets stated in the Hog Slaughtering Industry Development Guidelines for can be reached by the end of this period. The team at Whole Hog Brief wish all our subscribers a Happy Christmas and Prosperous New Year

12 PRICE MONITOR ISSUE NO /12/10 PAGE: 12 Company News Maple Leaf Foods has announced the closure of the sale of its pork processing operation in Burlington, Ontario, to Fearmans Pork, Inc., an affiliate of Sun Capital Partners Inc. for c. Can $20 million. In a statement the company said that Maple Leaf Consumer Foods will maintain a very strong relationship with the Burlington business which will supply its eastern Canadian operations. There will also be a continued relationship with the Rothsay rendering business, which will continue to provide services to the Burlington operation. Maple Leaf Foods has also announced that it will close its prepared meats facility in Berwick, Nova Scotia. The Berwick facility is a 200,000 square foot multi-purpose facility that employs c. 280 people. Berwick produces bacon, ham, sliced meats, sausage and deli products under the Larsen and private label brands. The Company will winddown operations beginning February 2011 and will close at the end of April. Production will be consolidated at Maple Leaf's prepared meats facilities in New Brunswick and Ontario where there is capacity. The Company will continue to produce products under the Larsen brand and meet its ongoing customer requirements to supply the Atlantic market. Closure costs, including severance, decommissioning and asset write-downs, are expected to be c. CAN $17 million before tax, CAN $9 million of which is cash expenses. Of the total closure costs, c. CAN $10 million will be recorded in Q and the remainder when the facility is decommissioned in 2011.At its annual investor conference in Toronto in November a review of the Company's value creation plan was presented by members of the Company's senior management team. Michael H. McCain, Maple Leaf Foods' President and CEO, said, that he expecst the plan to, "...deliver significant and sustainable value to our shareholders now and over the next five years. We are focused on implementing the plan, which will see us build strength and competitiveness in our business by simplifying products and product lines, increasing the scale of our manufacturing facilities, and investing in advanced technology." Maple Leaf Foods expects to increase EBITDA margins by more than 75% through implementing the plan, including a number of near-term initiatives to increase profitability. The Tulip Food Company has annnounced its best results ever. Tulip's CEO, Flemming N. Enevoldsen, gave seevral reasons for the performance. Cost reductions and growth in several markets - especially foreign ones - are the main drivers of increased profits. Turnover in 2009/2010: was c. 640 million Euros and the profit after tax was c. 35 million Euros. Tulip has 10 factories, six in Denmark, three in Germany and one in Sweden and c. 2,300 employess. "We have some of Europe's and maybe the world's best products, and therefore Tulip has great PRODUCER PRICES FOR PIGMEAT FROM AROUND THE WORLD WHOLE HOG Price Monitor Date: 6 December 2010 European Union National currency % Change previous week Source: Whole Hog ( Exchange Rates 06 December 2010 potentials for intensified growth abroad," said Enevoldsen, "This is one of the targets of the new strategy plan which started on 1st October 201 Tulip has a number of very modern production facilities and a very competent staff, and we are very well equipped to face the international competition". Hormel Foods based in Austin, Minnesota has reported diluted earnings per share of 90 cents, a 17% gain from the 77 cents per share posted one year earlier and above the average analysts' estimate of 79 cents per share. UK (pence/ kg dw) US $ (cent/ kg dw) Euro (euro/- kg dw) Week ending Belgium Denmark France Germany Ireland Italy Netherlands Spain Hungary Poland Czech Republic United Kingdom Nov-1 0 The Americas USA Dec Nov-1 0 Mexico Dec-10 Brazil Dec-10 Australasia Australia p er US$ per UK per Euro Australian $ UK Canadian $ Japanese Yen US$ Euro Danish Kroner Solid growth in its refrigerated foods and Jennie-O turkey segments helped the company post better-than-expected earnings in Q4 ended Oct. 31 with all five of its segments contributing to sales growth. Sales in the period reached US$2.1 billion, up 23% from the fourth quarter of The company expects the momentum of top-line growth to continue into 2011 despite the expected challenges of continued high raw materials costs and higher commodity grain costs.. Whole Hog Brief is published monthly. Editorial: orial: editor@porkinfo.com Subscriptions: tions:subsscriptions@porkinfo.com Phone: +44 (0) Fax: ax: +44 (0)