Japan willing to take beef from US cattle over 30 mos | TSLN.com

Japan willing to take beef from US cattle over 30 mos

Japan has lifted age restrictions on beef exported by the United States and Canada in what Kent Bacus calls a ringing endorsement of the safety and quality of the U.S. beef production system.

Bacus, the director of International Trade for the National Cattleman’s Beef Association, said much emphasis has been placed on mitigating the bovine spongiform encephalopathy (BSE) risk, leading to one of safest designations in the world from the World Organization for Animal Health. Japan closed its door completely to U.S. beef in 2003 amid BSE concerns before opening access with age restrictions in 2005.

The USDA estimates that this expanded access could increase U.S. beef and beef product imports to Japan by up to $200 million annually. The agreement is also an important step in normalizing trade with Japan, as Japan further aligns its import requirements with international standards for BSE.

The USDA’s estimate could be conservative, Bacus said, given the demand in Japan for U.S. beef cuts including tongues and short plate.

“Anytime we have more available supply we can sell to a strong customer like Japan, that’s going to benefit the entire supply chain,” he said.

Remaining competitive in the face of the current 38.5 percent tariff on U.S. beef is still the challenge facing both countries, a challenge that Bacus said can be overcome through a bilateral trade agreement.

“That’s something we have asked the Trump administration to prioritize and they certainly have responded,” he said. “We know the trade representative, Robert Lighthizer, has made this a priority and his team has been working with Japan to find a way forward.”

Bacus said tariffs receive a tremendous amount of attention but it is actually the non-tariff trade barriers that tell the story, tending to be a greater restriction than tariffs. Though most U.S. cattle are slaughtered before they reach 30 months of age, the removal of the non-science-based trade barrier is an endorsement of the quality and safety of U.S. beef, something Bacus said he will celebrate. He said he hopes the momentum will continue to include countries like China, Taiwan, Korea, and the Philippines, allowing them to enjoy U.S. beef without unjustified restrictions and trade barriers.

Joe Schuele, vice president, Communications for the United States Meat Export Federation, said while about 80 percent of U.S. beef is from fed cattle, the lifting of the age restrictions could strengthen the cull cow market.

“Japan is such a large market that even though it will be a relatively small percentage of our total exports to Japan, it’s still a pretty good bump in exports,” Schuele said. “We did about $2 billion in exports to Japan last year, we think this will add another $150 to 200 million. That may not sound like a big increase but $200 million is about the amount of beef we export to Europe in a year, about the amount we export to the Middle East in a year.”

Schuele anticipates added value in cuts including tongues, tripe, some muscle cuts and middle meats, shoulder clods, and briskets as more barbecue cuts are marketed to Japanese consumers and interest in steaks grows. Japan is the dominant market for tongues, with the ability to ship tongues to Japan adding about $12 per head.

“It’s a little more difficult to differentiate those,” he said. “Our beef from fed cattle is a rather unique product, it’s high in marbling, a lot of intramuscular fat. The beef from older cattle will be a bit more like beef from older cattle from, say, Australia or New Zealand, but we do think there’s pretty strong interest among Japanese consumers for it.”

Schuele calls this a significant step to putting BSE in the rearview mirror as far as international trade is concerned, allowing the U.S. to market beef based on taste and quality rather than concentrating on safety alone.

Korea, he said, has been a model of what red meat consumption can look like when consumers are not saddled with high tariffs. Red meat consumptions has grown, he said, in Korea as the country has come to trade agreements not only with the U.S. but with other red meat suppliers. He said the same scenario will play out with Japan but the U.S. is currently the only red meat supplier on the outside, looking in that has not received tariff relief. Canada, Australia, Mexico, New Zealand are all beef-supplying countries who have received tariff relief. In pork, Canada, Europe, and Chile are the main suppliers, all of whom have gained tariff relief.

“We really need to get on a level playing field with these other red meat suppliers to capitalize on what we anticipate will be a pretty strong surge in red meat consumption in Japan once consumer prices don’t have to include those high tariffs,” he said. F