Cheap Imports Boost Japan's Beef Supply

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Cheap Imports Boost Japan's Beef Supply

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Cheap Imports Boost Japan’s Beef Supply
[2018.10.15]

Demand for beef slumped in Japan just after the turn of the century with the outbreak of BSE, but that demand has rebounded in recent years.

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In fiscal 2017, the supply of beef to the Japanese market returned to the 900,000-ton level for the first time since fiscal 2001. Domestically produced beef accounted for 330,000 tons, while imports accounted for the remaining 572,000.

In 1990, beef imports stood at 384,000 tons, but that amount steadily rose after the liberalization of Japan’s meat market in 1991. By 2000, imported beef had almost doubled to 738,000 tons. That year was the peak for overall supply of beef, including domestic beef, at 1.103 million tons.

But in September of the following year there was an outbreak of bovine spongiform encephalopathy in Japan. And in December 2003, another BSE outbreak occurred in the United States, resulting in a ban on imports of American beef that lasted for two years and led to a slump in beef consumption. Imports from the United States resumed in 2005 and the amount of imported beef steadily rose thereafter. From 2010, the level of imported beef remained for several years at around 500,000 tons, but then rose in 2017 by 9% year-on-year.

Australia and the United States account for over 90% of all beef imports to Japan, at 298,000 and 231,000 tons, respectively.

A study conducted by the Agriculture & Livestock Industries Corporation found that the average price per 100 grams of wagyū from Japanese cattle was ¥795, which is more than 2.5 times the ¥292 average retail price for the same amount of American beef. As the average age of livestock farmers in Japan continues to rise, the supply of labor-intensive wagyū cannot keep up with demand, resulting in a steady price increase.

Beef imports to Japan are currently subject to a 38.5% tariff, but if the Trans-Pacific Partnership agreement were to come into effe ct, that tariff would be incrementally reduced over a period of 16 years to 9%â€"just one-fourth the current level. Even though the United States dropped out of the TPP, there is a strong possibility of a similar sort of bilateral trade agreement with Japan that would reduce the tariff to the same level, so it seems likely that the price of imported beef will be reduced significantly in the years ahead.

Wagyū has not been in direct competition with imported beef in terms of quality and price, but if the price of imported beef falls, it will be a serious blow to the cheaper breeds of Japanese cattle, such as cross breeds of dairy cattle and wagyū cattle.

  • [2018.10.15]
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