A Wall Street View of the Food & Agribusiness Industry

1. A Wall Street View of the Food & Agribusiness Industry U.S. Meat Export Federation May 22, 2008 Christine L. McCracken

2. Key Market Insights • Equity markets VERY sensitive to relatively insignificant events • Commodities equally unpredictable and more global • Food manufacturers initially in disbelief, now managing costs/prices • Retail and foodservice not prepared and may have limited ability to adjust • Food and food-related stocks may not be as “safe” as they once were

3. So What Is Going on With the Market? • Market Recovering…Is the Worst Over? • Fed Tightening…Next Move Up • Weak Dollar – “Confetti” Currency • Recession? Stagflation? • Are We in a Bubble? • Asia (Chindia) • Commodities Consumer Sentiment Will Drive Market

4. Consumer Sentiment Decidedly Negative Lowest in 28 Years – How Low Can it Go?

5. …But Wall Street Marches On

6. So Where is the Disconnect? “Wall Street” versus “Main Street”

7. Food News Equally Confusing Food Safety Food Labeling Renewable Energy Resource Use Sustainability

8. Challenging Times in Food • Cost inflation is bad and getting worse • Ag Commodities (protein, dairy, oils) • Energy & Packaging – Oil Prices Reach $132BBL • Labor (ICE Raids Ramping Up) & Healthcare • Trading Down: Consumer is only beginning to feel the pinch • Foodservice to Retail • Casual Dining to Quick Service • Beef to Chicken/Pork • Polarization of the Consumer: Indulgence vs. Private Label • Pricing and Cost Control Important/Margin Maintenance • Food Safety Now Center Stage (HSUS Campaign) • Innovation: Convenience, Health & Wellness, Ethnic • Sustainability: The Next Big Thing

9. Food Industry TrendsWidespreadCommodity Cost Pressure

10. Food Industry TrendsConsumers Trade Down

11. Convenience Indulgence Health & Wellness Food Industry TrendsInnovation Drives Consumption

12. Agribusiness Industry Trends • China, China, China • Growing Influence of International Markets • Australian Drought • South American Production • Growing Middle Class in Asia • European Agricultural Reforms • Renewable Fuels Debate • Trade Policy-Anti Trade Sentiment Growing • Impact of the Funds • Battle for Acreage Continues • What Happens If There is A Crop Failure?

13. Increases Appear Sustainable Source: USDA

14. So What Is Important To Wall Street? • Expectations vs. Reality • Focus Is Increasingly Short-Term • Fundamentals Still Matter • Herd Mentality • Relative Valuation

15. CRC Company Coverage

16. Tyson(TSN): NEUTRAL • Challenges in Beef and Chicken, But Strong Results in Pork • Beef Turnaround Unclear – Packing Overcapacity, Canada • Chicken Expansion Jeopardizes Margins – “Industry Owes Us” • Strategy Questionable: Raised Without Antibiotics, Big Birds • Management Change – Talent Losses, Setting High Expectations • Focus on Value Added, International Acquisitions and Costs • Street Anticipating A Speedy Recovery

17. JBS Friboi (Swift & Co.) • Foreign Ownership Adds Trading Complexity • Acquisitions of National and Smithfield • Wall Street Jaded By IPO • Irrational Behavior: Maybe Not? • Raids Costly for Swift and Industry • Focused on Value Added, Efficiencies?

18. Smithfield (SFD): BUY • Dominant Player in the Pork Industry • International Success Mixed • Needed Exit From Beef: Lowers Debt • Hog Cycle Nearing Bottom – Will Be Ugly • Focus on Consolidating Brands/Plants • Upside to $38

19. Smaller direct meat involvement with sale to SFD. Hebrew National/Healthy Choice still core. Management change is key. Focus on cost savings and pricing, Could consider M&A Sale of Trading changes dynamic, Could see more Processed Meats/Food Manufacturers • Oscar Meyer doing well, gaining share. • Company remains committed to processed meats. • Morale is improving following management changes. • In the early innings of a turnaround. • Processed meats remains a core business. • Projecting 1-3% sales growth, margins expected to double by 2010. • New management and processed meats personnel. • Value Added processing a core focus at the firm. • Expecting year/year drop in hog prices to benefit pork margins. • Turkey business subject to higher feed costs, but strong holidays. Bottom Line: The Competitive Landscape is Changing

20. Commodity Processors • Archer Daniels Midland (ADM) NEUTRAL • Benefitting from Strong Global Commodity Demand – Trade • World Class Logistics Network • More Than Just an Ethanol Story • Higher Corn Costs: A Big Deal • Massive Capital Investment ($3B in Next 3 Years) to Drive Growth in Plastics & Ethanol • Bunge (BG) BUY • Best South American Growth Pure Play • High Fertilizer Prices A Positive • Appreciation of the Real • Logistical Network A Positive

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22. Christine L. McCracken Cleveland Research Company 222 North Sepulveda, Suite 1775 El Segundo, California 90245 Phone: (310) 563-1900 Cell: (310) 683-8348 Email: cmccracken@cleveland-research.com

23. Disclosures Important disclosures for the companies mentioned in this report can be found at www.cleveland-research.com/clients/disclosures Buy: The stock’s return is expected to exceed the market due to superior fundamentals and positive catalysts. Underperform: The stock’s total return is expected to underperform the market due to weak fundamentals and a lack of catalysts. Neutral: The stock is expected to be in line with the market due to full valuation and/or a lack of catalysts. Valuation and Risk: Price targets are established under various valuation methods including P/E, P/S, EV/EBITDA on financial estimates based on forward earnings. Price targets are not established for every stock. The price target’s effectiveness may be affected by various outside factors. Risk assessments can be found in the most recent research on these stocks. Other Disclosures: I, Christine McCracken, certify that the views expressed in the research report(s) accurately reflect my personal views about the subject security(s). Further I certify that no part of my compensation was, is, or will be directly or indirectly related to the specific recommendations or views contained in the research report(s). The analysts responsible for the preparation of this report have no ownership stake in this company. Cleveland Research Company provides no investment banking services of any type on this or any company. The information transmitted is intended only for the person or entity to which it is addressed. Any review, retransmission, dissemination or other use of, or taking of any action in reliance upon, this information by persons or entities other than the intended recipient is prohibited. If you received this in error, please contact the sender and delete the material from any computer. Member FINRA/SIPC