Japan Meat Demand Growing; Production Seen Flat

Growing Japanese demand for red meats and flat production levels of beef and pork are expected to drive the market there this year, said the USDA’s Foreign Agricultural Services/Tokyo in a published report that was not an official USDA report.

Japanese beef and pork production remained flat last year as slightly heavier carcass weights offset lower slaughter numbers.  As a result, and because of rising beef demand, total imports of US beef reached a 14-year high as the US overtook Australia as the leading supplier of chilled beef to Japan, the report said.  However, competition intensified among suppliers to Japan’s growing market for imported pork.




FAS/Tokyo estimated that 2017 Japanese cattle slaughter declined 1% from 2016 to 1.045 million head, the report said.  And, because of an increase in the slaughter of crossbred cattle, there also was an increase in the proportion of medium-grade beef on the market.

Steeper declines in wagyu and dairy cattle slaughter were offset by increases in the slaughter of F-1 crossbred cattle.  Historically, the average finishing age is about 30 months for Wagyu steers, 24 months for F-1 crosses and 20 months for Holstein steers, the report said.

Beef producers continued to exit the industry after years of growth, signaling an end to Japan’s herd rebuilding after a Foot and Mouth Disease outbreak in 2010.  The 2017 number of beef cattle farms in operation fell 3.5% to just 50,100 from 51,900 in 2016.  The industry as a whole remains skewed toward small operations.




However, beef production increased slightly to 469,000 tonnes, the report said.  Slightly heavier finishing weights led Japanese beef production to increase 1% from 2016 amid a gradual consolidation in the industry, which saw the average cattle-per-farm number increase to 49.9 in 2017 from 47.8 in 2016.

Facing fast-growing consumer demand for red meat, retail and foodservice providers ramped up purchases of foreign beef, propelling imports upward by 14% to 816,000 tonnes, the report said.  With a 35% growth in chilled beef imports, the US captured additional market share from Australia.  The US’ share of the Japanese market was estimated at 42%, up four percentage points, while Australia’s share contracted to 50%.

The heavier slaughter weights also resulted from the effects of the FMD outbreak.  As cattle were culled, fewer feeder cattle were available, and prices rose.

To compensate, farmers there did what US feeders do.  They kept the on feed a little longer, resulting in heavier slaughter weights.

Feeder cattle prices now are beginning to soften, signaling that production is back to normal, and prices can return to pre-FMD levels.

In the short term, FAS/Tokyo did not expected the decline in feeder calf prices will have a booster effect on production as prices remain well above pre-2016 levels.




No fed cattle sold last Wednesday on the Livestock Exchange Video Auction for the second straight week.

Cash cattle traded last week at $127 to mostly $128 and up to $129 per cwt on a live basis, down $1 to $2 from the bulk of the previous week’s action.  Dressed-basis sales were reported at $204 to $205, steady to up $2.

The USDA’s choice cutout Tuesday was up $1.00 per cwt at $220.52, while select was up $0.07 at $214.79.  The choice/select spread widened to $5.73 from $4.80 with 98 loads of fabricated product sold into the spot market.

The CME Feeder Cattle index for the seven days ended Monday, was $147.76 per cwt, down $0.54.  This compares with Tuesday’s Mar settlement of $146.55, up $1.00.