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Japan Reopens; First Product On The Way

U.S. beef products will be back in Japan by the time you read this.

U.S. beef products will be back in Japan by the time you read this. That reality occurs just a week or so shy of the two-year anniversary of their banning due to the discovery of BSE in a Washington state dairy cow.

On Monay, Japan announced all systems go for resumption of North American beef imports that meet requirements agreed to by the countries more than a year before. The agreement restricts these imports to beef and selected products of animals verified to be 20 months of age and younger.

The Japanese government's decision came on the heels of a final report by a Japan Food Safety Commission issued late last week. The government-appointed panel ruled that differences in BSE risk between North American and Japanese beef would be "very small" if the import conditions were observed.

On Monday, U.S. Meat Export Federation (USMEF) president and CEO Phil Seng told reporters the first shipment of U.S. beef would arrive in Tokyo's Narita Airport on Dec. 17. Among the products from various U.S. suppliers included in that parcel, according to the Lincoln Journal Star, will be Nebraska beef.

USMEF's announcement was upstaged just a few hours later, however, when Harris Ranch Beef announced that a final surveillance audit completed that day by USDA had cleared the way for the Selma, CA-based processor to export product to Japan. The first shipment was to head out Wednesday.

Japan becomes the 67th country to reopen to at least limited trade in U.S. beef, but Japan is a very important cog.

Gregg Doud, National Cattlemen's Beef Association economist, says foreign market trade for U.S. beef was worth about $15/cwt. to the fed market before the 2003 closure. Without Japan, the U.S. had recovered about a third of that, or $5/cwt. The Japanese market represent half of the remaining $10, he says. Other important markets yet to open, but on the cusp, include Taiwan, South Korea, Singapore and Hong Kong.

In a flurry of Monday morning press conferences, speakers expressed their eagerness to win back the market-share levels seen prior to discovery of BSE in the U.S. For the U.S., Japan represented its top export market in 2003, at $1.4 billion in sales. For Canada, Japan was its third-largest beef-export destination, with more than $81 million worth of beef going to Japan in 2002.

But regaining market share that has gone primarily to Australia, will take some time, everyone agrees. For one thing, the Japan market is opening with product limitations that didn't exist before the ban.

For another, it will take some time to build age-verified supplies in the U.S. USDA says 30-35% of the U.S. cattle supply currently would fit the age-verified requirement. USMEF, however, says indications from its members would put that percentage at more like 10-15%

And, recent polling data in Japan has indicated a high percentage of Japanese consumers claiming they won't buy U.S. beef once it becomes available. Time will tell on that front, but many analysts expect that resolve to dissolve fairly quickly.

To help that along, Seng says USMEF is planning a media and promotional blitz in Japan to build consumer confidence and win back consumers.

In other big news this past weekend, USDA's Animal and Plant Health Inspection Service announced its intention to amend regulations to re-establish, under certain conditions, the importation of whole cuts of boneless beef from Japan. Japanese beef exports have been banned in the U.S. since BSE was first discovered in Japan in the fall of 2001 (see next news item).

Interestingly, and in keeping with all the weird coincidental twists this BSE trade saga has taken the past two years, Japan Today reported confirmation over the past weekend of Japan's 21st case of BSE. The Hokkaido Prefecture cow died the previous week.

TAGS: Exports