Japan Tariff Action Raises Export Fears, Pressures Cattle Markets

August 1, 2017 03:31 PM

Friday’s announcement of Japan’s increase tariffs on U.S. frozen beef starting Aug.1, is sending ripples of concern through the cattle industry. There was little time to prepare, as U.S. exports just barely reached over Japan's tariffs trigger point. Watch video above for more industry reaction. 

The U.S.’s top beef processing states: Nebraska, Texas and Kansas, are all readjusting to the possibility of higher costs of doing business in Japan.

“Japan is the largest buyer of U.S. beef exports and the third largest destination for Texas beef,” says Richard Thorpe, president of the Texas and Southwestern Cattle Raisers Association (TSCRA). “A 30% increase in the tariff rate will be detrimental to the U.S. cattle raisers, who rely on beef sales for their livelihoods, as well as the Japanese consumers who enjoy U.S. beef on their dinner tables. This is a prime example of why we need a free trade agreement, like the Trans Pacific Partnership (TPP), with Japan,” Thorpe adds.

In 2016, Nebraska exported over $316 million in beef and beef products to Japan which accounted for 16% of the total U.S. beef exports to Japan.

“What makes this action worse is that the United States recently walked away from an agreement, the Trans Pacific Partnership, which would have rendered this action meaningless,” says Steve Nelson, president of the Nebraska Farm Bureau. “Now is the time for the Trump administration to follow through on their promise for a “better deal” for Nebraska’s cattlemen and women, and now is the time for a bilateral agreement with Japan.”


Cash and Futures Markets React

Feeder cattle closed sharply down Friday, after USDA confirmed Japan planned to increase tariffs on U.S. frozen beef.

Along with the news from Japan that day, analysts say U.S. cattle markets were still slumping from unseasonably high summer prices and the past week’s growing U.S. cattle inventory report.

August live cattle ended $1.40 lower on Friday at $112.900 cwt, and October $1.15 cwt lower at $112.42 cwt.

August feeders ended $1.77 cwt lower at $146.05.

Monday markets were steady to slightly lower. Tuesday markets rebounded slightly.


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Spell Check

Robie Houser
Vale, NC
8/2/2017 09:19 AM

  Why are we blaming the lack of a TPP? Why not blame Japan for doing the 50% tariff and then retaliate by charging them 60% on their exports to the USA? Remember Japan is doing this to the USA because there are no repercussions. The people at the Farm Bureaus, NCBA and at Ag-Web are not using common sense. Please think about it and use COMMON SENSE. We should stop our imports of beef from the people South and North of our borders or impose a 50% tariff on them because Japan has shown us how it is done! Yes, I belong to a Farm Bureau and raise beef cattle.

Kuttawa, KY
8/2/2017 05:07 PM

  Isn't it great that Sonny, Zippy, and the NCBA are "leveling the playing field" for farmers and ranchers while keeping a secret from the US consumer as to where their beef comes from. Why don't we just ship them frozen Brazilian beef (as soon as USDA lifts the ban) and nobody would know the difference.


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