The U.S. beef industry began this week with positive news that access to the Japanese market will improve significantly. Following a week of rumors and unofficial statements, U.S. Trade Representative Ron Kirk and United States Agriculture Secretary Tom Vilsack announced Monday morning that the United States and Japan have agreed on new terms and conditions under which Japan will allow imports of U.S. beef from cattle up to 30 months of age beginning February 1.

Live-cattle futures rose sharply on Monday following the announcement. The February contract closed up $2.65 at $128.95, April closed at $133.43, also up $2.65 and June closed up $2.35 at $128.85.

The U.S. Meat Export Federation (USMEF) estimates this expanded access will bring a 45 percent increase in U.S. beef exports to Japan, in value and volume, during 2013. Export value this year could reach $1.5 billion, compared with about $1 billion during 2012.

 “This is great news for cattlemen and women and is a significant milestone in our trading relationship with Japan,” said NCBA President J.D. Alexander. “Japan is a great market for U.S. beef and we look forward to continuing to meet Japanese consumer demands. This move is an important step forward in paving the way toward greater export opportunities to one of our largest export markets.”

USMEF lists increased beef access to Japan as the number-one opportunity for U.S. beef exports this year. In 2000, prior to the discovery of BSE in the United States, our beef exports to Japan reached 1.16 billion pounds valued at $1.77 billion, and accounted for 43 percent by volume and 50 percent of the value of all U.S. beef exports that year. We also enjoyed a 53 percent share of Japan’s beef imports at the time. USMEF notes that much of the lost volume was not made up by other countries, leaving a void in the Japanese market. In 2012, Japan imported a total of about 575,000 metric tons compared to 857,715 metric tons in 2000. USMEF sees that void as an opportunity for U.S. beef to regain market share in Japan.

Speaking to a group of USMEF staff and guests last week, USMEF Senior VP for the Asia-Pacific region Joel Haggard said retailers and meat buyers in Japan have been anticipating the change and are ready to buy U.S. beef once more becomes available. Retailers and food-service operators are likely to begin offering more U.S. beef once they have access to consistent supplies at more affordable prices.

“The U.S. beef industry – from farmers and ranchers to exporters – will benefit from increased exports to this premium market,” says USMEF President and CEO Phil Seng. “At the same time, the trade and consumers in Japan will see a wider variety of beef products and improved availability of U.S. beef in the retail and food service channels.”
Joe Parker Jr., president of the Texas and Southwestern Cattle Raisers Association, also praised the agreement. “Ranchers across the country are relieved to see these restrictions finally lifted, so they can again begin providing Japanese consumers with more of the safe and wholesome beef they want.”

Prior to this agreement, Japan has limited its imports of U.S. beef to that from cattle 20 months of age or younger, a restriction added when Japan resumed imports of U.S. beef in 2005 following the BSE-related ban that began in 2003.