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Will Reopening Of The Japan Market Be Good News?

Japanese officials were busy this week paving the way for reopening their borders to U.S. beef. Seemingly they want the issue resolved before their Prime Minister visits the U.S. in late June.

The impetus apparently is as much to avoid the appearance of yielding to U.S. pressure at that meeting as it is avoiding further difficulties in U.S.-Japan relations. The Japanese are saying all the right things of late, indicating their decision will be based on food safety and not politics.

It will take the U.S. a long time to win back that market but there's real concern the concessions made by the U.S. to re-establish the Japan trade will set the system up for failure. A great case in point was provided by this week's de-listing of another U.S. plant from the export list after Hong Kong found bone fragments in a Harris Ranch beef shipment from California.

Interestingly I had a conversation with a Harris Ranch management person about three weeks ago. He related as to how he couldn't get to sleep at night knowing that -- given the way cattle are fabricated today -- there's rarely a case of beef that doesn't have a bone fragment in it. Plus, the paperwork and system are so complex there are a host of things that can go wrong.

Several packing officials have remarked the systems implemented to reopen the markets are so extensive they remove the incentive to export. With the U.S. cattle industry losing billions of dollars, and fat cattle trading $12-$15 below where they would be will full trade, it's understandable why there's been such a push to get the markets reopened. The problem is it appears we've created a system almost impossible to live up to. -- Troy Marshall