1. PART 1-3
Global Risk
Intelligence
Weather Threats & Agricultural Impacts
Eyeing The Future Into 2013 & Beyond
Big Picture On Commodities, Planetary Impacts & ‘Wild Card’ Possibilities
An Advanced Path In Financial Planetary Risk Management For JBS
Advanced Forecasting Corporation [AFC]
Crossing New Thresholds®
Copyright © AFC 1993-2012 Confidential :: Sao Paulo Presentation
JBS // Jerry O’Callaghan & Sao Paulo Team  July 05, 2012
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2. INTRO
Climate
Investment
What A Farmer Does When He Listens To A Weather Presentation …
Advanced Forecasting Corporation [AFC]
Crossing New Thresholds®
Copyright © AFC 1993-2012 Confidential :: Sao Paulo Presentation
JBS // Jerry O’Callaghan & Sao Paulo Team  July 05, 2012
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3. INTRO
Climate
Investment
This Is What A Truly Great Business Does: It Connects Ideas To SEE AHEAD …
Advanced Forecasting Corporation [AFC]
Crossing New Thresholds®
Copyright © AFC 1993-2012 Confidential :: Sao Paulo Presentation
JBS // Jerry O’Callaghan & Sao Paulo Team  July 05, 2012
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4. INTRO
Climate
Investment
Commodity Price Volatility & Changing Climate: A “Connective Risk Web”
Advanced Forecasting Corporation [AFC]
Crossing New Thresholds®
Copyright © AFC 1993-2012 Confidential :: Sao Paulo Presentation
JBS // Jerry O’Callaghan & Sao Paulo Team  July 05, 2012
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5. INTRO
Climate
Investment
I Get Asked This Question A Lot: What Is A “Climate Risk Economist?
Let’s break it down into three easy components …
Climate Risk Economist
A 50% chance of There is a A rare happy
sunny spells & 0.00000000674% economist cycling
scattered showers chance the sun in the snow
Advanced Forecasting Corporation [AFC] may blow-up (this guy must be
Crossing New Thresholds®
Copyright © AFC 1993-2012 Confidential :: Sao Paulo Presentation
JBS // Jerry O’Callaghan & Sao Paulo Team  July 05, 2012
tomorrow Irish huh? )
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6. INTRO
Climate
Investment
About AFC: We Do 3 Things … Weather, Commodities & Wild Card Events
AFC Professional Background
• Since 1993
• Global network of meteorologists, risk analysts, mathematicians, and IT pod teams
• Making a new office in Montevideo to ‘feed’ South American market with precision
weather risk management
Advanced Forecasting Corporation [AFC]
• Cornell – atmospheric physics; MBA – economics; PhD, DSc – Planetary
Crossing New Thresholds ®
Electromagnetics
Copyright © AFC 1993-2012 Confidential :: Sao Paulo Presentation
JBS // Jerry O’Callaghan & Sao Paulo Team  July 05, 2012
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7. INTRO
Climate
Investment
In Summary, 90:10 Weather Rule: Our 6-Step Rule To Get A Positive ‘Edge’
Advanced Forecasting Corporation [AFC]
Crossing New Thresholds®
Copyright © AFC 1993-2012 Confidential :: Sao Paulo Presentation
JBS // Jerry O’Callaghan & Sao Paulo Team  July 05, 2012
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8. INTRO
Climate
Investment
Know Your Planetary Risks: Where, When, How Often, And How Much?
Advanced Forecasting Corporation [AFC]
Crossing New Thresholds®
Copyright © AFC 1993-2012 Confidential :: Sao Paulo Presentation
JBS // Jerry O’Callaghan & Sao Paulo Team  July 05, 2012
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Slide 8

9. INTRO
Climate
Investment
Global Weather Volatility: Becoming Your Most Uncontrollable Risk
A big climate shift through mid-2014: expect big moisture transport upheavals in
China, the USA, Brazil & Australia, incited partially by increasing solar changes.
Advanced Forecasting Corporation [AFC]
Crossing New Thresholds®
Copyright © AFC 1993-2012 Confidential :: Sao Paulo Presentation
JBS // Jerry O’Callaghan & Sao Paulo Team  July 05, 2012
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10. INTRO
Climate
Investment
The Four Big Ones: The Largest Problems Facing Agriculture
Advanced Forecasting Corporation [AFC]
Crossing New Thresholds®
Copyright © AFC 1993-2012 Confidential :: Sao Paulo Presentation
JBS // Jerry O’Callaghan & Sao Paulo Team  July 05, 2012
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11. INTRO
Climate
Investment
X-Class Solar Flares: Impacts, Including Recent East USA Power Grid Collapse
Advanced Forecasting Corporation [AFC]
Crossing New Thresholds®
Copyright © AFC 1993-2012 Confidential :: Sao Paulo Presentation
JBS // Jerry O’Callaghan & Sao Paulo Team  July 05, 2012
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Slide 11

12. PART1
Weather
Risks
Global Drought Monitoring Index: Includes Recent Rainfall, Soil Moisture Content
Jul 04, 2012
KEY
Exceptional
Extreme
Severe
Moderate
Dry patches / none
Advanced Forecasting Corporation [AFC]
Crossing New Thresholds®
Copyright © AFC 1993-2012 Confidential :: Sao Paulo Presentation
JBS // Jerry O’Callaghan & Sao Paulo Team  July 05, 2012
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13. PART 1
Weather
Risks
Global Flood Intensity Disaster Risk Assessment Prediction Map
Jul 05 – Jul 12, 2012 (full 8-day period)
Advanced Forecasting Corporation [AFC]
Crossing New Thresholds®
Copyright © AFC 1993-2012 Confidential :: Sao Paulo Presentation
JBS // Jerry O’Callaghan & Sao Paulo Team  July 05, 2012
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14. PART 1
Weather
Risks
Flood / Storm Risk High-Resolution Zoom Forecast: Jul 05 – Jul 13, 2012
Flood / Storm
Risk Forecast
Legend
(red/orange = no
threat; white =
average precip)
Above normal
precipitation
Bouts of
heavier precip
Significant
storminess
Larger-scale
event with
bigger impacts
Some severe
flooding and
potential disaster
Advanced Forecasting Corporation [AFC]
Crossing New Thresholds®
Copyright © AFC 1993-2012 Confidential :: Sao Paulo Presentation
These forecasts come with > 80% confidence
JBS // Jerry O’Callaghan & Sao Paulo Team  July 05, 2012
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15. PART 1
Weather
Risks
Temperature (Weekly Average) Insight Ahead: Jul 14 – Jul 22, 2012
Sudden change to
colder! Some frosts /
freezes coming to
Southern Brazil soon
Advanced Forecasting Corporation [AFC]
Crossing New Thresholds®
Copyright © AFC 1993-2012 Confidential :: Sao Paulo Presentation
JBS // Jerry O’Callaghan & Sao Paulo Team  July 05, 2012
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16. PART 1
Weather
Risks
Average Weekly Temp Deviation From Normal (C): Jul 05 – Jul 13, 2012
Reduced temps coming to the
Midwest; peak heatwave is over!
Advanced Forecasting Corporation [AFC]
Crossing New Thresholds®
Copyright © AFC 1993-2012 Confidential :: Sao Paulo Presentation
JBS // Jerry O’Callaghan & Sao Paulo Team  July 05, 2012
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17. PART 1
Weather
Risks
Regional Temp/Precip/Soil Moisture Deviations, Plus Notable Events
Forecast Avg Temp Deviations (C) Forecast Total Precip Deviations (%) Forecast Soil Moisture Change (cm)
Anomaly Quick Glance Thu Jul 05 – Fri Jul 13 Entire Week Out Plots
Big drying Flooding rains
over in dark solid
Heatwave southern blue-green
expands in China
China continues
Finally, an influx of Some flash floods in
moisture now pushing heat Northern India as the Torrential downpours in
into Pakistan ‘heavens open up’ solid blue-green
Advanced Forecasting Corporation [AFC]
Crossing New Thresholds®
Copyright © AFC 1993-2012 Confidential :: Sao Paulo Presentation
JBS // Jerry O’Callaghan & Sao Paulo Team  July 05, 2012
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18. PART 1
Weather
Risks
USA Extended TEMPS Outlook: Month-By-Month, Stand. Dev. / 100
July 2012 August 2012
MODELED
Jul 04,
2012
September 2012 October 2012
Advanced Forecasting Corporation [AFC]
Crossing New Thresholds®
Copyright © AFC 1993-2012 Confidential :: Sao Paulo Presentation
JBS // Jerry O’Callaghan & Sao Paulo Team  July 05, 2012
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19. PART 1
Weather
Risks
USA Extended PRECIP Outlook: Quarter-By-Quarter, Stand. Dev. / 100
Jul-Aug-Sep 2012 Aug-Sep-Oct 2012
MODELED
Jul 04,
2012
Sep-Oct-Nov 2012 Oct-Nov-Dec 2012
Advanced Forecasting Corporation [AFC]
Crossing New Thresholds®
Copyright © AFC 1993-2012 Confidential :: Sao Paulo Presentation
JBS // Jerry O’Callaghan & Sao Paulo Team  July 05, 2012
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20. PART 1
Weather
Risks
USA Extended SOIL Moisture Outlook: Month-By-Month, Stand. Dev. / 100
July 2012 August 2012
MODELED
Jul 04,
2012
September 2012 October 2012
Advanced Forecasting Corporation [AFC]
Crossing New Thresholds®
Copyright © AFC 1993-2012 Confidential :: Sao Paulo Presentation
JBS // Jerry O’Callaghan & Sao Paulo Team  July 05, 2012
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21. PART 1
Weather
Risks
Global Insight Ahead Forecast Total Precip Anomaly From Norm
Jul 31 – Aug 09, 2012 Main Takeaways: USA Plains & Corn Belt likely
Compared to 20-Yr Averages becoming wetter in early Aug; So Brazil wetter
Advanced Forecasting Corporation [AFC]
Crossing New Thresholds®
Much drier
Copyright © AFC 1993-2012 Confidential :: Sao Paulo Presentation
JBS // Jerry O’Callaghan & Sao Paulo Team  July 05, 2012 Drier Near normal Wetter Much wetter
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22. PART 1
Weather
Risks
Global 30+ Day Weekly Update Fcst Avg Temp Anomaly From Norm
Jul 31 – Aug 09, 2012 Main Takeaways: USA Plains / Midwest Likely
Compared to 20-Yr Averages Cooling-Down To Near Normal In Early August
Advanced Forecasting Corporation [AFC]
Crossing New Thresholds®
Much cooler
Copyright © AFC 1993-2012 Confidential :: Sao Paulo Presentation
JBS // Jerry O’Callaghan & Sao Paulo Team  July 05, 2012 Cooler Near normal Warmer Much warmer
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23. PART 1
Weather
Risks
Global Advanced Forecast (Temps + Precip): Jul / Aug / Sep 2012
Forecast Confidence Rating: 85% ● Notable Storm Events With Abrupt Gradients
Advanced Forecasting Corporation [AFC]
Changeable
Crossing New Thresholds® Stormy Wetter Normal Precip Drier Drought
Many Temp Shifts Some Record Cold
Copyright © AFC 1993-2012 Confidential :: Sao Paulo Presentation Below Normal Temps Normal Temps Above Normal Temps Some Record Heat
JBS // Jerry O’Callaghan & Sao Paulo Team  July 05, 2012
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Slide 23

24. PART 2
Commodity
Impacts
Food Price Volatility: Some Connecting Themes, Direct /Indirect Impacts
Advanced Forecasting Corporation [AFC]
Crossing New Thresholds®
CII = AFC 1993-2012 Confidential :: Sao Paulo Presentation
Copyright ©
Critical Information Infrastructure
JBS // Jerry O’Callaghan & Sao Paulo Team  July 05, 2012
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25. PART 1
2
Commodity
Impacts
Non-Ranked Top Hotspot Vulnerability Risk Assessment Commodity Forecasts
1 :: Thailand – abnormally dry still, especially southern half (– to V
for sugar, coffee, rice)
2 :: Southern / SE China – dryness increasing (– for sugar, rice)
3 :: South-Central Argentina – very dry (– for cattle, soybeans,
corn)
4 :: India – delayed Monsoon finally starting on July 9 (V to + for
rice, sugar, corn, wheat, cotton)
Jul 05 – Jul 12, 2012 (full 8-day period) 5 :: SE & Plains USA – heatwave then severe t-storms (– for wheat,
corn, cattle, poultry, natural gas; V to – for soybeans)
6 :: North-Central Brazil – expanding drought (V to – for sugar,
corn, coffee, soybeans, wheat; 0 for cocoa, OJ, cotton; + for cattle)
7 :: Upper Midwest USA – adequate rain during heat (V for corn,
soybeans; – for milk, cattle, hogs)
8 :: SW Russia (Volgograd) – very warm but increasing rainfall (V
to + for sugarbeet, wheat, canola, barley)
9 :: Eastern Europe / Western Russia – heatwave, but ending next
week (– to V for wheat, sugarbeet, barley)
10 :: Canadian Prairies – heat & more dryness (– to V for canola,
corn, coal, wheat, cattle, milk, barley, soybeans, sugarbeet)
11:: Mexico – very good rains (+ for corn, wheat, OJ, sugar)
12 :: Southern Brazil – heavy rain moving slowly north over the
next few weeks (V for sugar, coffee, corn, soybeans; + for rice)
13 :: Northern & Western Europe – continued cooler & showery (0
to V for grains, sugarbeet; + for cattle, milk, lean hogs)
14 :: Colombia – normal rain (0 for coffee, bananas, sugar)
15 :: Northern / NE China – stable rainfall but heatwave (V for rice,
hogs, corn, wheat, soybeans)
16 :: Japan – Reactor 4 accident; blows more radiation (– for fish,
rice, milk, cattle, lumber, US$, Yen)
17 :: New Zealand – colder with rain and snow (0 to – for milk)
18 :: Kazakhstan – hot with sct’d t-storms (V to – for wheat,
barley)
19 :: Malaysia / Indonesia – some increase in t-storms (V for sugar,
rice, coffee, palm oil)
20 :: Ivory Coast / Ghana – some t-showers (0 for cocoa)
21 :: Siberia – more moderate to heavy rain (– for lumber)
Advanced Forecasting Corporation [AFC]
Blue text (RIGHT): “—” means upward price pressure due to hurtful weather &/or
Crossing New Thresholds®
conditions; “+” means downward price pressure due to helpful weather &/or
Copyright © AFC 1993-2012 Confidential :: Sao Paulo Presentation
JBS // Jerry O’Callaghan & Sao Paulo Team  July 05, 2012 conditions; “0” means neutral territory; “V” means highly volatile. Non-ranked.
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26. PART 2
Commodity
Impacts
Weather Risks To Farms: Short-Term (Thru 7/12); Longer-Term (Thru 10/12)
Cattle Dairy
Farms Farms
Advanced Forecasting Corporation [AFC]
Crossing New Thresholds®
Copyright © AFC 1993-2012 Confidential :: Sao Paulo Presentation
JBS // Jerry O’Callaghan & Sao Paulo Team  July 05, 2012
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Slide 26

27. PART 2
Commodity
Impacts
Next Quarter (Jul-Aug-Sep, ‘12): Forecast Weather Impact Bias On Commodity Pricing
Advanced Forecasting Corporation [AFC]
Crossing New Thresholds®
Copyright © AFC 1993-2012 Confidential :: Sao Paulo Presentation
JBS // Jerry O’Callaghan & Sao Paulo Team  July 05, 2012
Updated Jul 02; Next Update Jul 30, 2012
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28. PART 3
Wild Card
Threats
The Sunspot Activity Is Waning More Quickly: Peak Now Likely In Q1 Of 2013
Advanced Forecasting Corporation [AFC]
Crossing New Thresholds®
Copyright © AFC 1993-2012 Confidential :: Sao Paulo Presentation
JBS // Jerry O’Callaghan & Sao Paulo Team  July 05, 2012
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29. PART 3
Wild Card
Threats
Advanced Forecasting Corporation [AFC]
Crossing New Thresholds®
Copyright © AFC 1993-2012 Confidential :: Sao Paulo Presentation
JBS // Jerry O’Callaghan & Sao Paulo Team  July 05, 2012
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30. PART 3
Wild Card
Threats
Scarcity Of Water In China: Hotspot Increases Risk Of Food Security ‘Alarms’
Predicted Water Shortages In China Into 2015
(0 to 1, with 1 representing the most severe shortages)
China’s expanding drought will
likely be one of China’s largest
challenges in modern times.
RISKS through 2015 are:
• increased famine
• large changes in GDP
• political relationship / trade
crises, and
> 0.65 • other socio-economic shifts
0.50 – 0.65 Check this out:
http://www.businessinsider.com/
0.35 – 0.50
Advanced Forecasting Corporation [AFC]
china-water-risk-2011-11?op=1
Crossing New Thresholds®
< 0.35
Copyright © AFC 1993-2012 Confidential :: Sao Paulo Presentation
JBS // Jerry O’Callaghan & Sao Paulo Team  July 05, 2012
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31. PART 3
Wild Card
Threats
What Is China REALLY Doing By Invading Tibet? Hint: Blue Gold
China has diverted
certain rivers in the
past, and is trying
again, bit by bit
• Instability in
Asia growing.
The need is
simple: China
and India BOTH
want access to
the largest
locked-up
freshwater
reserves in the
world (here in
the Himalayan
Plateau in
Tibet).
Advanced Forecasting Corporation [AFC]
Crossing New Thresholds®
Copyright © AFC 1993-2012 Confidential :: Sao Paulo Presentation
JBS // Jerry O’Callaghan & Sao Paulo Team  July 05, 2012
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32. PART 3
Wild Card
Threats
One Of The Biggest Construction Projects In The World: Moving Water
Advanced Forecasting Corporation [AFC]
Crossing New Thresholds®
Copyright © AFC 1993-2012 Confidential :: Sao Paulo Presentation
JBS // Jerry O’Callaghan & Sao Paulo Team  July 05, 2012
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33. PART 3
Wild Card
Threats
Radioactive Milk, Beef, Rice, Water, Bluefin Tuna: Already “On The Market”
Advanced Forecasting Corporation [AFC]
www.enenews.com to get all the
Crossing New Thresholds ®
latest updates on the radiation spread
Copyright © AFC 1993-2012 Confidential :: Sao Paulo Presentation
JBS // Jerry O’Callaghan & Sao Paulo Team  July 05, 2012
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34. PART 3
Wild Card
Threats
Farm Animal Disease: Will Increase With Climate Change. Keep An Eye On It!
A mathematical model that explains
how the risk of an outbreak of
bluetongue virus in Europe changes
under different wind
speeds/directions.
New Diseases? Higher
Winds In Next 12 Months
Advanced Forecasting Corporation [AFC]
Elevates This Risk
Crossing New Thresholds®
Copyright © AFC 1993-2012 Confidential :: Sao Paulo Presentation
JBS // Jerry O’Callaghan & Sao Paulo Team  July 05, 2012
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35. PART 3
Wild Card
Threats
In Summary … Climate Economic Risk: Will Dictate So Many Business Angles
Advanced Forecasting Corporation [AFC]
Crossing New Thresholds®
Copyright © AFC 1993-2012 Confidential :: Sao Paulo Presentation
JBS // Jerry O’Callaghan & Sao Paulo Team  July 05, 2012
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Slide 35