It’s too soon to gauge the longer-term impact the disaster will have on U.S. agricultural exports to Japan, but industry representatives indicated they expect limited effect to beef and pork shipments. Japan is also the third-largest export market for U.S. beef and a top buyer of dairy products.
Still, the prospect supply disruptions or an economic slump that weakens Japan’s meat consumption triggered selling in the futures market and prompted meatpackers to pull bids in the cash market, traders at CME Group in Chicago said.
“The concern is how much damage to the ports they had” in Japan, Jim Burns, a CME hog trader, said March 14. “And infrastructure-wise, even when the ports are open, how much product can they get into the country… and how can they distribute it?”
The tsunami, triggered by a massive March 11 earthquake off the northeast coast of Japan, destroyed entire towns and is believed to have killed at least 10,000, according to news reports.
Beef and pork imports to Japan may have only limited disruptions because most shipments are delivered to ports from Tokyo southward, livestock analysts Steve Meyer and Len Steiner said in a March 14 report. The earthquake’s epicenter was about 250 miles northeast of Tokyo.
While many Japanese ports were closed at the end of last week, most were not heavily damaged and were expected to be open again this week, Meyer and Steiner wrote.
“Refrigeration is indeed an issue, but reports indicate that the power grid is operational in many areas and power will be diverted and re-routed to areas in need,” Meyer and Steiner said.
Japan bought $1.65 billion worth of American pork and related variety meats in 2010, 67 percent more than the next-largest buyer, Mexico, according to U.S. Meat Export Federation data. In terms of volume, shipments to Japan last year, at 1.28 billion pounds, accounted for 5.7 percent of U.S. pork production.
Jim Herlihy, a spokesman for the U.S. Meat Export Federation in Denver, said the group didn’t have enough information yet to make any broad assumptions about any impact for beef and pork shipments to Japan.
“While this is an unspeakable tragedy for communities along the northeast coast of Japan, it’s important to keep in mind that the major population centers have been impacted to a much lesser degree,” Herlihy said in a March 14 e-mail.
“Right now we have little reason to think consumer demand in Japan will suffer significantly or that trade will be dramatically impacted,” he said. “How Japan’s national economy will weather this disaster and how quickly it will recover is obviously a more complex question, but we’re awaiting more factual information before drawing any conclusions.”