Producers will have a long road ahead of them in regaining lost Japanese beef market share after a Japanese announcement of trade resumption. The U.S. Meat Export Federation forecasts only 100,000 to 120,000 metric tons of meat will be traded in 2006.
The market has been closed since Dec. 23, 2003 with the first U.S. confirmed case of bovine spongiform encephalopathy. Industry leaders say trade won't reach pre-BSE levels until at least 2008. And even then it is necessary trade requirements move to recognized international standards of at least allowing beef from cattle 30 months or younger. The current agreement allows for cattle only 20 months or younger who are age and source verified.
USMEF Chief Executive Officer and President Phil Seng says the first shipment of meat to Japan is scheduled for Dec. 17th leaving from Denver. It will arrive in Japan on Dec. 18th, with a small welcome ceremony for the first U.S. beef shipment for nearly two years.
Japan is also sending a team from Japan to the United States this week to inspect U.S. plant facilities. The teams will provide a report to the Japanese government Dec. 26. Seng says a positive report will be a "big catalyst of confidence" for Japanese consumers and the government in the safety of U.S. beef.
Contrary to media reports, Seng says a latest Japanese consumer survey finds only 25% of the population is concerned about the risk of BSE. USMEF plans to do increase public relations and marketing activities to continue pushing the quality of U.S. beef. USMEF is pushing 17 new cuts made from the chuck and rounds to provide lower cost U.S. beef alternatives in Japanese meat cases.
Few animals ready for source verification requirements
According to Monday's announcement, Japan will now only accept beef and beef products from animals that are 20 months of age or younger. USDA has estimated that about 35% of the U.S. herd could qualify under this limitation, and specific requirements must be met through a U.S. government verification program before the beef is eligible for export.
Seng explains that his packers report the percent of the herd able to meet the requirements is closer to 15%. He explains that current birth records will allow 10-12% of cattle and another 3-5% can be age verified with the A40 grading technique. More cattle are expected to come on board in March with the new calving season.
Next resumption expected in Hong Kong
Seng sees Hong Kong accepting U.S. beef trade hopefully this week or next. USMEF also fully expects Taiwan to resume trade by the end of January.
Korea on the other hand is experiencing more resistance than any other country. He says he is "cautiously optimistic" it will resume trade within the next few months. However, if Korea accepts a 30 month and younger age limit, it is a very important development.
Japan also accepted bone-in beef. Seng says pre-BSE trade in Korea consisted of 50% of bone-in beef. If Korea follows Japan's suit within the aspect, it would be huge.