Beef Magazine is part of the Informa Markets Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them. Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.

There Will Be Prime Rib In Japan For Christmas

After being locked out of the Japanese market for roughly two years, the market is partially reopening

Well it seems to have finally arrived. After being locked out of the Japanese market for roughly two years, the market is partially reopening to cattle products from cattle 20 months of age or younger.

Midweek -- before the announcement had even become official -- U.S. packing companies were making arrangements for the first shipments of U.S. beef to Japanese consumers since December 2003.

This is a great victory, but certainly only a partial victory for the U.S. beef industry. Discussions will turn now to convincing Japan to accept the international standard of 30 months of age.

It will definitely take time to win back our markets fully, but the effort is certainly worthwhile. 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. The U.S. has thus far regained a third of that or about $5/cwt., and Japan represents half of the $10 left on the table.

It's debatable how much of the market the U.S. can recapture, or at least how long it will take to regain it. But most experts believe 20-30% of the lost markets are waiting for us to show up. The remainder will have to be won back.

One disturbing concern is just how effective the rhetoric in Japan -- helped along by unfortunate comments from some quarters of the U.S. beef industry -- has been in raising concerns about the safety of U.S. product. In fact, a Kyodo News survey conducted last week found 75.2% of Japanese consumers unwilling to eat U.S. beef. That's higher than was found a year ago by the same survey.

The survey indicated Japanese consumers have more confidence in their domestic product despite a score of Japanese BSE cases since 2001 and a risk factor that is expected to remain astronomically high. That disconnect is part nationalistic pride and part our own doing. After all, we exported the concerns about our product to Japan, giving Australia and Japanese activists the ammunition they needed.

Self-inflicted wounds are the most difficult to accept. I hope we've learned our lesson about raising illegitimate concerns about beef safety as a means to achieve political gains, but I doubt it.

Regardless, it's a great relief to see the markets reopened. Korea and Taiwan are expected to follow Japan's lead shortly, though they will adhere to the accepted world standard of 30 months of age.

What will be interesting to watch will be how significant the premiums for age-verified cattle will be, and how long they'll last. One feeder told me that once the Japan announcement comes through officially, every animal in his inventory sheet will automatically be worth another $12/head.

TAGS: Exports