ST. LOUIS, Mo. — A special report just issued by the Rabobank Food & Agribusiness Research and Advisory (FAR) group indicates the consequences of the earthquake and tsunami to Japan’s agricultural and food industry could be dire. While the full impact of the earth quake and radiation are not yet understood, the report—which estimates the potential impact on six major sectors of Japan’s agricultural industry—projects that food safety concerns and supply shortage will limit exports and cause imports to rise.
The findings are based on the Rabobank FAR report entitled “Japan Earthquake: Magnitude of Impact on Food and Agriculture.” As the leading provider of financial services for the global food and agriculture industry, Rabobank created and maintains the FAR unit to conduct ongoing research and analysis on issues of importance to agriculture around the world. Rabo AgriFinance, part of Rabobank, provides this exclusive information to its client producers and agribusinesses in the U.S.
“While the situation is still evolving, the domino effect of the disaster will likely result in more imports from trade partners, such as the U.S., Australia and China,” notes Jean-Yves Chow, Rabobank senior industry analyst North East Asia and lead author of the report. “The radiation issues at the Fukushima plant have heightened food safety concerns at a time when Japanese food self-sufficiency is already low. Japan may need to revise its food security strategy to manage the country’s risk.”
The report notes more than a quarter of Japan’s domestic pork production, 18 percent of its beef production and 22 percent of its poultry production comes from areas impacted by the earthquake, tsunami or radiation from the Fukushima nuclear plant. In addition, cold storage has been compromised by electricity loss, which could lead to the need for additional imports.
“Based on the current weakness of the U.S. dollar compared with the Australian dollar, the U.S. would be a competitive source for additional beef exports,” says Sterling Liddell, Vice President, FAR. Liddell continues to note that the milk production season in Australia and New Zealand is winding down, making the U.S. along with other parts of the Northern Hemisphere a possible source for additional dairy imports.
The full report, which is available upon request, provides an overview analysis of each food sector. Highlights from the analysis of each is below: