1. Bill Winkelman National Pork Board Update

2. Pork Production Per Year With weight and volume up, 2015 may be the largest pork production year on record!

3. PEDv: Few sow herd breaks Data from 708 sow farms, 14 of 19 large systems reporting. 2.022 million sows!

4. Today’s U.S. Pork Production

6. Today’s By-Product Market

7. So, where are we going? Support the National Pork Board’s vision to: Build Consumer Trust Drive Sustainable Production Grow Consumer Demand

8. Goal 1 – Build Consumer Trust Working collaboratively with food chain partners, the National Pork Board will enhance consumer trust in modern pork production by promoting producer adoption of on-farm management practices that reflect our ethical principles and by sharing our commitment to continuous improvement with consumers and key stakeholders.

9. Building Trust – Antibiotics FDA regulated Involves food safety and human health Not pork-specific (crosses all species) No real, strong advocates For customers, changes are a brand differentiator This IS a different situation!

10. Our Focus: Research, Education, Communication Defined 5 strategic research priorities Pilot project and blue-ribbon taskforce Increase funding in 2016 PQA Plus revision focused on Good Production Practices Emphasize producer record-keeping tools Producer publications – newsletter, magazine, pork.org Be present at industry and government hearings Proactive media outreach – reporters and bylines On-farm continuous improvement shared through stories

11. Since 2000, $5.3 million invested in research

12. National Pork Board Actions ACTION: National Pork Board adopted the new position and policy statement as presented in the June 2015 Board meeting. ACTION: The National Pork Board intends to allocate up to $1.4 million in funding of scientific research and antibiotic risk assessment studies, producer education and consumer awareness programs.

13. Building Trust – Common Industry Audit Goal Develop a workable, credible and affordable on-farm verification system Objectives – Consistent, reliable system assuring on-farm animal well-being and food safety – Eliminate audit duplication and minimize administrative burden – Develop consistent standards – Create a process for inter- and intra-observer consistency and protection of herd health

14. Goal 2 – Drive Sustainable Production The National Pork Board will invest in research and producer education programs that enhance the productivity and sustainability of pork production and deliver benefits to producers, consumers and the community.

15. Drive Sustainable Production – Swine Health Anecdotal reports from the region Published papers from researchers Researcher to researcher communications Reports to AASV Swine Health Committee BUT, what did we do with this information? $15 million investment in a Swine Health Information Center American Association of Swine Veterinarians Task Force determination: PEDv NOT a surprise.

16. Scope of Work Swine Disease Matrix project Swine health data – analysis & monitoring for trends Global swine health and issues identification Improve the biosecurity ability of the US swine herd New Swine Health Information Center Executive Director – Dr. Paul Sundberg Board comprised of NPB, NPPC, AASV and at-large representatives

17. Enrollment numbers of last offering of the following courses: Course5 Years AgoCurrentIn 5 Years 10-Year Growth Percentage Introductory Swine Management 33243953260 % Swine Production29131639435 % Monogastric Nutrition35842248435 % Monogastric Nutrition (Graduate) 10611812316 % Other*41505829 % *Includes: Pork Fellows & Specialized Senior Capstone (ISU), Production Systems (AU), Swine Reproductive Management (graduate course NCSU) and Comparative Nutrition (OSU) 17 Drive Sustainable Production – USPCE Developing the next generation of pork producers

18. Drive Sustainable Production – USPCE Number of individuals training in swine-related research at any given time: Level of Study5 Years AgoCurrentIn 5 Years*10-Year Growth Percentage Undergraduates17426334397 % Masters of Science75749223 % Doctoral Candidates58657529 % Post-doctoral Fellows12142067 % *Assuming funding will increase 18 Developing the next generation of pork producers

19. Working in concert with food chain partners, the National Pork Board will grow domestic and international consumer demand by focusing on pork’s improved nutrition, quality and sustainability. Goal 3 – Grow Consumer Demand

20. Grow Consumer Demand – Export Goal By 2020, increase pork exports through access to new markets and expansion of existing markets, and achieve an increase of 9% average annual increase in value and quantity, compared to 2014 year-end data. Value: $2.423B, ↓15% from 2014 Volume: 910,976 MT (2.01 B lbs.), ↓6% from 2014 25% of production Key U.S. Pork Export Statistics: (January - May 2015)

21. Mexico 642.0 ↑5% Japan 417.1 ↓11% China/HK 287.8 ↓21% Korea 211.0 ↑38% Canada 177.3 ↓3% C/S Am 113 0% Oceania 57.9 ↓18% Caribbean 39.7 ↑5% ASEAN 35.7 ↓51% Japan $705.3 ↓18% Mexico $508.7 ↓17% Canada $321.2 ↓7% Korea $285.1 ↑37% China/HK $273.6 ↓26% C/S Am $132.8 ↓3% Oceania $85.8 ↓21% Caribbean $43.7 ↓3% ASEAN $35.5 ↓58% Volume (Million Pounds) Value (Million $) Source: USDA statistics compiled by USMEF, compared to 2014 Top U.S. Export Markets: January – May 2015 Grow Consumer Demand – Export Goal

22. Grow Consumer Demand – China Population: 1.355 billion or 20% of world population More migration to urban areas Increasing disposable income Growing modern retail segment Outside experts, economists and U.S. Meat Export Federation see China as the No.1 priority market for pork exports through 2025

23. Grow Consumer Demand – China Challenges: – Scarcity of arable land – High feed costs – Pollution, water, disease Declining sow numbers and production Climbing live hog prices Is there a pork gap coming? China has a zero-tolerance on ractopamine in pork imports Self-sufficiency projected to be over 90% in 2020…?

24. Grow Consumer Demand – U.S. Consumer Meat is trending: Protein is in! Fat is back!

25. Grow Consumer Demand – U.S. Consumer

26. Segmentation Study 2010 vs. 2015 As compared to 2010, now significant group of consumers eat fresh pork 3+ times every two weeks. In 2010, we could not find a group that ate fresh pork 3 times/week. Ave. number of serving at home in last 2 weeks Total U.S. NPB Target Fresh Pork1.53.2 Total Beef2.83.5 Chicken3.94.6 Ground Beef1.61.8 Beef Steaks/Roasts1.21.7 Grow Consumer Demand – U.S. Consumer

27. THEME: Beyond just showing pork ideas during the grilling season, we will motivate our pork target in a fun way to let pork take over their summer grill. Grow Consumer Demand – U.S. Consumer

28. Where do we go from here?

29. Productivity measures are CRITICAL in 2015! June report farrowing intentions look low, but the reason is that year-ago farrowings were high vs. the breeding herd. Litter size is back on its 2% growth path – and March-May was RECORD LARGE litter sizes.

30. U.S. Pig Crop

31. Production up 12.2% week ending 6/26/15

32. Profit Past and Future

33. Checkoff Revenue 33

34. 2015 and 2016 Budget Adjustments Evaluate 2015 Programs – Reduced nearly $2.1 million in program savings by lowering program spending from $66 million to $64 million – Redirected savings to U.S. and international marketing 2016 national program spending estimate lowered to $61 million Budget reductions, plus existing reserves and change in Designated Reserves = $7.5 million in funds for use in 2015 and 2016 To date, 9 state pork associations contributed $852,000 to U.S. and international marketing efforts in 2015 and 2016 High Production + Lower Value = Reduced Checkoff Revenue

35. The Opportunities Ahead Elevate demand for U.S. pork in Asia and Latin America Working with NPPC on trade issues (MCOOL, TPP, new access) Expand the domestic consumer base and spending on pork Lead the conversation on antibiotics Develop capability to monitor and respond to foreign disease threat Continue to improve animal handling practices Support alternative production Be the catalyst bringing people and investment into our industry

36. New Producer Tools for 2016 PQA revision and site assessment alignment with Common Audit Update and re-launch of our Safety System toolkit Resources for producers to create a We Care Barn Culture Zoetis Individual Pig Care extended to additional producers through NPB Small/Beginning Producer Resources - P.I.G. Self-study guide for Certified Swine Manager Program

37. This message funded by America’s Pork Producers and the Pork Checkoff Thank you!