technology...including raspberry ketones. • from a unique class of molecules called beta-agonists....

CMC 2013 Annual Conference 2013-05-30

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The Good, the Bad and the Ugly of meeting Global Demand for Animal Protein:

Where does ractopamine fits? Stéphane Beaudoin P. Ag.

Regional Market Access Manager

Latin America - Canada

Technology a responsible and sustainable approach to meet the need of

increasing global protein demand

Global Market Access Elanco Animal Health


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Elanco Vision: We are in the “People” Business

Food and companionship enriching life

We make food more abundant, affordable

and safe

We improve the lives of pets

Elanco

• Founded in 1954

• 2012 revenue of $2.036 billion

• Over 2,500 employees

• Offices in 45+ countries

• Market products in 75+ countries

• Companion animal care

• Global food animal production

• Swine, dairy, poultry and beef – Disease treatment, control and

prevention

– Animal productivity

– Food safety

– Vaccines

– Enzymes

– Knowledge solutions


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The Good, the Bad and the Ugly of meeting Global Demand for Animal Protein:

Where does ractopamine fits?

AGENDA

• Where is the Global meat demand going?

• Why is technology necessary to meet growing protein demand.

• Ractopamine as one technology option amongst many.

– What it is

– Its value

– Canadian landscape on ractopamine support.

– Future of ractopamine

Global Food demand

According to FAO, just satisfying the expected food and feed demand will require a substantial increase of global food production of 70 percent by 2050, involving an additional quantity of nearly 1 billion tones of cereals and 200 million tons of meat.

Source: FAO

http://www.fao.org/


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Global Food demand The global average daily calorie availability would rise to 3050 kcal per person, • a 10 % increase over its level in 2003/05. To achieve this, • global cereal production would need to increase by 40 % overall The advent of biofuels has the potential of changing all that and causing world demand to be higher… Meat consumption per caput would, • Rise from 41kg (112g/d) today to 52 kg (142g/d) in 2050

•from 30 kg (80g/d) to 44 kg (120g/d) in the developing countries. • Should this perspective be realized by 2050, the level of per-caput food availability will still vary widely between countries, although at higher levels.

• Industrial countries will have average availability levels of nearly 3600 kcal/person/day; the developing countries as a group may reach almost 3000 kcal.

To reach those levels of food availability, countries can either: 1) increase production or 2) increase net imports of food or 3) a combination of both

According to FAO’s long-term projections towards 2050, today’s group of developing countries is projected to provide most of the projected consumption growth by expanding their own production. However they will also increase their food imports significantly.

From an exporting country perspective: GOOD = Potential expansion in those countries Investments welcomed BAD To UGLY = impact on trade… When considering the means to get there…

From an exporting country perspective:

GOOD = More exports $$ BAD = increased complexity of markets UGLY = Operating under protectionism measures necessary to protect importing countries’ development


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Source: Various price reporting services and publications, carc wt equiv.

ALL HOG INDUSTRY PLAYERS

BUT DIFFERENT LEAGUES!

Source: USDA/FAS, Global AgriTrends Forecasts


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657.3

1,038.4

268.7

463.8

102.3 140.7

85.9

193.3

67.3 106.3

13.2 23.5

296.2

640.9

158.3

330.4

62.8 99.2 50.4

140.4

35.1

70.2

10.1

20.6 0

100

200

300

400

500

600

700

800

900

1,000

1,100

Mill

ion

Met

ric

Ton

nes

World Developing Countries

Dairy ** All Meat Porcine Poultry Meat

Bovine Ovine

Source: FAO, 2006c pg 79, Table 16

Rising Demand for Meat - Dairy

Projected Demand: 2010 to 2050

Source: USDA, Macroeconomic Dataset GDP/Capita Annual Growth (Cumulative Since 2000)

Trade is Essential to Feed the World


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Evolution of Trade Negotiations

• Quota

– Volumes

• Tariffs

– Rates

• Sanitary and Phytosanitary (SPS)

– Residues

– Diseases

– Pathogens

Seek to Understand: Intelligence

Naïve

Good Intention

Mischief

Protectionism

• Food needs

• Food security goals

• Limitations

• Land

• Water

• Complimentary

• Variety / Choice

• Economics

• Politics


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Trade Structure – Rules

• WTO (World Trade Organization)

– SPS (Sanitary and Phytosanitary)

• International scientific reference bodies

– Codex • FAO (Food and Agriculture Organization)

• WHO (World Health Organization)

– OIE (Organization for International Epizootics)

– IPPC (International Plant Protection Convention)


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WTO SPS

World Trade Organization

Sanitary and Phytosanitary

AGREEMENT ON THE APPLICATION OF SANITARY AND

PHYTOSANITARY MEASURES

BASIC RIGHTS AND OBLIGATIONS

• “Members shall ensure that any sanitary and

phytosanitary measure is applied only to the extent

necessary to protect human, animal or plant life or

health, is based on scientific principles and is not

maintained without sufficient scientific evidence ...”

WTO Reference To Codex Alimentarius Commission

HARMONIZATION

• “Members shall play a full part ... development and periodic review of standards, guidelines, and recommendations with respect to all aspects of sanitary and phytosanitary measures.”

CONSULTATIONS AND DISPUTE SETTLEMENT

• “In a dispute ... a panel should seek advice from experts ... or consult the relevant international organizations, at the request of either party ...”


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The label contains complete use information including cautions and warnings. Always read, understand and follow the label and use directions. Indications and specifications vary by registration. Label information is available at: http://www.elanco.us/products/index.htm or http://www.elanco.com/products.html

* Note: Ractopamine was assessed by the 62nd (2004) and 66th (2006) JECFA (Joint FAO/WHO Expert Committee on Food Additives) to determine an ADI (Acceptable Daily Intake) and MRLs (Maximum Residue Limits)

for support of the use of ractopamine in swine and cattle. An Addendum to the 62nd and 66th JECFA monographs was released by the JECFA Secretariat on May 31, 2010, titled, “Evaluation of data on ractopamine

residues in pig tissues”. Each assessment has affirmed the same ADI and MRLs. Based upon the scientific assessment, the reference tissue suggested is kidney, and if monitored should ensure the safety of all tissues.

(Note: 1 µg/kg equals 1 part per billion.)

http://www.elanco.com/products.html


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Meat Consumption: Why it is important?

Benefits of Meat: •Meat can be part of a balanced diet contributing valuable nutrients that are beneficial to health.

•Meat /meat products contain important levels of essential elements for growth & development. Such as:

• protein, • vitamins, • minerals • and micronutrients

•Further processing of meat offers •the opportunity to add value, •reduce prices, •improve food safety •and extend the shelf-life. •This can result in increased household income and improved nutrition.

Source : FAO – Agriculture and Consumer Protection Department : Animal Production and Health

Meat Consumption : Why it is important? While the per caput consumption of meat in some industrialized countries is high,

•per caput consumption below 10 kg (28g/d) in developing countries must be considered insufficient and often leads to:

• under-nourishment and malnutrition.

•It is also estimated that more than 2 billion people in the world are deficient in key vitamins and minerals, particularly vitamin A, iodine, iron and zinc.

•Deficiencies occur when people have limited access to micronutrient-rich foods such as: •meat, •fish, •fruit •and vegetables.

Most people with micronutrient deficiencies live in low income countries and are typically deficient in more than one micronutrient. Highly nutritious foods such as meat are particularly required for HIV AIDS infected communities and also for women and children.



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Meat Consumption : Why it is important?

To effectively combat such malnutrition and under-nourishment • 20 g of animal protein per person per day • or 7.3 kg per year should be provided.

This can be achieved by an annual consumption of : • 33 kg (90g/d) lean meat or • 45 kg (125g/d) fish or • 60 kg (164g/d) eggs or • 230 kg (630g/d) milk

•These sources are usually combined in the daily food intake, but in regions where not all of them are readily available, intake of the others needs to be increased.

•Although nutrients from animals may be of higher quality or more readily absorbed than vegetable sources, it is possible to have a healthy vegetarian diet.


Meat Consumption The steadily growing world population and increasing incomes creates higher demand for meat, but at the same time leaves limited space for expansion in livestock production.

Therefore, the maximum utilization of existing food resources becomes even more important.

“DO MORE WITH LESS”

“BETTER MANAGE THE RESOURCES”



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US

Central/ South America

Middle East/ Africa

Asia Pacific

Europe

2009: 338m 2030: 322m

2009: 664m 2030: 680m

2009: 181m 2030: 313m

2009: 137m 2030: 341m

2009: 525m 2030: 3228m

Source: Rueters. Davos 2012. The Swelling Middle.

Global population will grow just under 2B people in the next 35 years, the biggest news is that the middle class, those people with the financial power to demand meat and eggs, will grow by 3B in the next 20 years. This growth is the most impactful to economies.

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20

World

population will require

70% More food, and

70% Of this food must come

from efficiency-improving

technology3

Sources: 1. Green, R., et al. January 2005. “Farming and the Fate of Wild Nature.” Science 307: 550-555. 2. Tilman, D., et al. August 2002. “Agricultural sustainability and intensive production practices.” Nature 418: 671-677. 3. “World agriculture: toward 2015/2030.” 2002. United Nations Food and Agriculture Organization, Rome. Accessed December 2, 2008. <ftp://ftp.fao.org/docrep/fao/004/y3557e/y3557e.pdf>.

In the year

Where will this 70% increase come from?


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Technology

Innovation

• Broader acceptance of currently available technology

• Expect more

• It is a necessity

Safety

• Due to increased trading/exporting environment need to have international standards like Codex.

What about consumers?

• How much do they care about technology?

• How much do they care about how animals are raised?

• Who drives trend/technology debate? Consumer or activists?

Source: Bret Stuart, CEO GlobalAgriTrends (February 2013) [email protected]

Sow Stalls will impact meat availability and productivity in EU? Good for who? Is it really consumer driven?

mailto:[email protected]


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28 STUDIES

26 COUNTRIES

OVER 97,000

CONSUMERS

2001-2010

Choice, a Consumers Rights The International Consumer Attitudes Study (ICAS)

Source:

See Appendix.

ICAS: Lifestyle Buyer The International Consumer Attitudes Study (ICAS)

Source:

See Appendix.


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ICAS: Lifestyle Buyer The International Consumer Attitudes Study (ICAS)

Source:

See Appendix.

Technology Enables Three Rights

• Access to safe, proven, efficiency-enhancing technologies ensures:

Source:

1. See Appendix.


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RACTOPAMINE HYDROCHLORIDE WHAT IS IT?

RACTOPAMINE is… • a VDD -approved feed ingredient that helps animals increase

the amount of high quality lean meat rather than fat. • has been safely used in pork production for more than a

decade. • is produced from two ingredients that can be found in nature,

including raspberry ketones. • from a unique class of molecules called beta-agonists. • not an antibiotic, a steroid hormone or genetically modified.

• Beta-agonists are used for both animals and in human

medicine as life saving drugs. • For example, beta-agonist health products have been used

safely in human medicine for many years as bronchodilators for asthma treatment.


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Ractopamine Safety in brief… • Ractopamine's safety has been and continues to be extensively evaluated and

confirmed. • The UN (Codex Alimentarius Commission) has affirmed its safety and adopted

global human safety standards for food from animals fed ractopamine.1,2,3 • Health Canada’s Veterinary Drug Directorate (VDD) validated its safety more

than 8 years ago. • 28 regulatory authorities globally have affirmed the human food safety of

meat from animals fed ractopamine. • Widely used by farmers in Canada, the United States, Australia, Brazil and

many other countries around the world. • Since its introduction in 1999, there have been no confirmed adverse human

health reports related to the consumption of meat products from animals fed ractopamine.

• No reports have been documented that show any recognized human health issues related to the consumption of meat products from food animals fed ractopamine.

• In fact, a person could eat as much as 700 pounds of pork each day from Paylean-fed pigs and still be below the no-effect level for any potential residues of ractopamine

3-Key Points

1. In Canada, all VDD approved drugs go through an extensive review process prior to approval and must demonstrate human and animal safety following approval

2. Ractopamine is approved for use in 3 species and its safety in animals and meat products is internationally recognized

3. Beta-Agonists have a positive effect on animals through improved animal productivity without increasing the need for natural resources


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RACTOPAMINE HYDROCHLORIDE IT’S VALUE?

Ractopamine Hydrochloride*:

Approved by 28 Regulatory Authorities** (26 swine approvals, 5 cattle approvals and 2 turkey approvals)

Australia (swine)

Barbados (swine)

Bolivia (swine)

Brazil (swine and cattle)

Canada (swine and cattle and turkey)

Colombia (swine)

Costa Rica (swine)

Dominican Republic (swine)

Ecuador (swine)

El Salvador (swine)

Guatemala (swine)

Honduras (swine)

Hong Kong (swine)

Indonesia (swine and cattle)

Malaysia (swine)

Mexico (swine and cattle)

New Zealand (swine)

Nicaragua (swine)

Panama (swine)

Peru (swine)

Philippines (swine)

South Africa (swine)

South Korea (swine)

Thailand (swine)

United States (swine and cattle and turkey)

and Puerto Rico

Venezuela (swine)

** Japan has established an ADI/MRLs (pork and beef)

** Taiwan established a MRL for beef muscle

*Approved species in parenthesis.

Paylean® for swine, Optaflexx® for cattle and

Topmax ® for turkey are trademarks for Elanco's

brand of ractopamine hydrochloride

The label contains complete use information including cautions and

warnings. Always read, understand and follow the label and use

directions. Indications and specifications vary by registration. April 2013


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4.0 Million MT of Pork and variety pork meat1 2.7 Million MT for Beef and variety beef meat2

1-2 Source: Brett Stuart, Global AgriTrends

Virtually all countries accept pork and beef imports based upon the Codex established safe residue tolerance levels for ractopamine, exceptions would be the European Union and China…and lately Russia. For example, countries such as Japan and South Korea accept pork and beef from animals fed ractopamine based upon theirs and other human food safety assessments.


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Global Benefits

RACTOPAMINE HYDROCHLORIDE (PAYLEAN® AND OPTAFLEXX®) IN PIG AND CATTLE FEED

AN EXPERT REVIEW OF THE GLOBAL BENEFITS AND HUMAN SAFETY Richard Raymond, M.D., Chair, Alan L. Sutton, Ph.D., Richard Fritz, M.S., Brett Stuart, MBA 14 June 2011

EXECUTIVE SUMMARY • Increased food servings

– 25 billion additional pork servings per year (100% worldwide adoption). – 1.2 billion additional beef servings per year (100% worldwide feedlot-

production adoption). • Enhanced economic value

– 9 billion US Dollars in additional pork with no additional investment in resources (75% worldwide adoption).

• Improved food security – leaner, heavier carcasses increase meat availability at more affordable

prices. • Decreased environmental impact

– more efficient utilisation of feed, water and other resources. • Established human safety


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Optaflexx (beef)

Extracted from Elanco Document CACTOP00004 2-13-2013 – available upon request

Paylean (pork)

• Previous George Morris Centre research has shown that the use of ractopamine could have increased producers’ returns by about $2/hog.

• During the high feed cost period production returns improved to $3/pig (Hunsberger and Grier, 2012).

• Users of ractopamine as well as other studies tend to suggest these results as conservative and some show value to $5 per hog.

Source: Ramifications and Consequences of the Ractopamine Protocols on the Canadian Pork

Industry , By Kevin Grier , Senior Market Analyst , George Morris Centre February 2013


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Canadian Environnemental claim

• Paylean® has been verified by the Canadian Environmental Technology (ETV) program. The performance claims of Paylean® were verified based on a study conducted by the Prairie Swine Centre. It was verified that: “When Paylean® is administered to swine at a level of 10 ppm in the finishing period, results are (with 95% confidence):

• Decreased water intake by 11.3% on average; • Decreased total water excretion (urine output and fecal

moisture) by 15.8% on average; • Reduced urinary nitrogen by 18.5% on average; and • Reduced total nitrogen excretion by 13.1% on average.”

RACTOPAMINE HYDROCHLORIDE CANADIAN LANDSCAPE ON

RACTOPAMINE SUPPORT


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Canadian landscape • Canadian Government support the technology (publically known)

– Safety recognized – Also recognize International standards and trade.

• Wide Industry acceptance of the technology (Beef and Pork) – Exception of some niche markets

• Specific export destination • Turkey (although there is a claim)

• Than Russia temporarily changed the game – Dynamic market with interesting premium – Entire supply chain weighting their chances/options

• Canadian racto free Protocol: – Potential Precedent (Intl standards vs trade barrier) – Logistically complex for variable to no incentive depending on

the supply chain stakeholder • Not a consumer issue

FUTURE OF

RACTOPAMINE HYDROCHLORIDE


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Ractopamine and technology

• There is a future for ractopamine and any other safe technology in Canada and Globally

• The challenge ahead of the meat Industry:

– Feed a growing population

– Feed a bigger portion of the population who can afford to put more meat into its diet

• KEEP IN MIND 99% of the consumers:

95% buy based on : TASTE-COST NUTRITION

4% buy on lifestyle preferences

Globally this will represent 8.91 billion people in 2050


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A time for action

The Three Rights: Food, Choice, Sustainability

Thank you

For questions, comments, follow up: [email protected]

technology...including raspberry ketones. • from a unique class of molecules called beta-agonists....

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