The U.S. ag attache in Japan has raised its forecast for Japanese beef consumption in 2013 to 1.275 MMT and has raised its import forecast by 5% from 2012 levels to 774,000 MT. The U.S. is expected to garner a larger share of beef business, with the attache projection beef imports from the U.S. will be up 25% from last year to 231,000 MT.
The attache says the U.S. beef is expected to gradually regain much of the market share lost to Australia over the past 10 years, due to the new rule allowing imports of U.S. beef from animals 30 months and younger. The attache says the revised projections assumes that Japan’s new import requirements will prompt some large scale retail and food service purchases to promote American beef. "This expansion is also expected to lead to American beef replacing some Australian chilled grass fed/short grain fed cuts and frozen grain fed cuts. However, substitutability of American beef for Australian frozen grass fed cuts, which make up roughly 45% of Australia’s beef cuts exported to Japan, is considered fairly small as these are mostly trimmings used by fast food chains in the manufacture of hamburger patties. In light of the above, Post projects a decrease of six percentage points (or 25,200 MT) for imports of Australian beef cuts to 420,000 MT. The prevailing market preference for medium graded grain fed cuts (American beef), coupled with a strong Australian dollar, and high Australian price offers, have stagnated Japan’s demand for Australian beef in recent years. Post expects that this downward consumption trend will most likely continue despite a long-term outlook by Meat and Livestock Australia forecasting a recovery in its cattle slaughter and beef production for 2013 and 2014... The American share of total beef imports in 2013 is expected to rise from 2012 levels by four percentage points to 31%, while Australian beef is expected drop by 6 percentage points to 56%," says the attache.
However, the attache warns that the high price outlook for U.S. beef in 2013 could impact Japan's purchases this year. "Although the number of Japanese buyers interested in American beef is growing, they are expected to remain price-sensitive and, despite some reported packer discounts, generally remain cautious. This apprehension may make trade somewhat less active than anticipated in the near future. The combination of these factors may reduce any risk of the beef safeguard triggering during Japanese Fiscal Year 2013, which starts in April," says the attache.
The attache expects Japan's 2013 beef production to file modestly to 505,000 MT due to a smaller calf crop. "A tight supply of expensive domestic beef could help increase sales of American beef by attracting value-seeking consumers, especially at the retail level," adds the attache.
Regarding the potential for U.S. pork in the Japanese market, the attache says although Canada provides stiff competition, the U.S. Is expected to hold its position as the top pork supplier to Japan.
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