Japanese Disaster Increases Food Import Needs

Japanese Disaster Increases Food Import Needs

While last month's earthquake and tsunami and problems with leaking nuclear reactors are tragic, they're not likely to have a long-term adverse effect on Japan's demand for U.S. ag products. Near term, Japan will need to import even more food and feed due to damage to its ag sector.

Some of Japan's ports in the northeast part of the country sustained major damage from last month's earthquake and tsunami. Others that weren't hit as bad are back in business and operating. The severe problems that are resulting from the March 11 natural disaster are still affecting a few of that country's crippled nuclear power plants in the hardest hit areas.

U.S. market prices for crops and livestock at first reacted with a shudder during the week following March 11. That's understandable because Japan has long been one of the largest and most reliable buyers of American corn, soybeans, beef and pork. However, while the events in Japan are tragic, they are not likely to have a long-term adverse effect on that nation's demand for U.S. agricultural products. That's the view of economists and export promotion specialists with U.S. farm and commodity organizations.

Actually, they say Japan may need to import more food and feed in the short term because of the damage to its ag sector. "It looks like the main pieces of Japan's agriculture are still in place and despite the tragic loss of life, Japanese agriculture will keep going," says Eric Erickson of the U.S. Grains Council, a grain export promotion group based in Washington, D.C. "We are fairly positive about the future of exports to Japan based on the information we are getting from our office in Tokyo."

Optimistic about Japan's long-term demand for U.S. beef, pork

Meat exporters are also optimistic about Japan's long-term demand for U.S. pork and beef, says Phil Seng, head of the U.S. Meat Export Federation. "There has been some disruption and dislocation, but beef and pork are still moving into the ports of Japan. We don't see long-term demand being adversely affected."

In the near term, the U.S. meat export group along with others, such as the National Pork Producers Council and the National Pork Board, are working to provide donations of cash and pork to help the Japanese people recover who are in the worst-hit areas. The approach on relief is helping them with food and shelter as well as helping rebuild badly damaged infrastructure in the northeast section of Japan.

Roy Bardole, an Iowa farmer who is chairman of the US Soy Export Council, says USSEC is monitoring the situation in Japan on the impact on the U.S. soy industry and is "identifying ways we can provide assistance to the Japanese during this difficult time."

Badly damaged northeast part of Japan is a key farming area

Northeast Japan, the area hardest hit by the earthquake and tsunami, is one of the important agricultural parts of Japan, says Chad Hart, Iowa State University Extension grain marketing economist. While it has less population than southern Japan, farmers in the northeast raise about 20% of that nation's hogs and 15% of the beef cattle.

Many of the northeast region's feed mills were near the ports and were severely damaged by the tsunami. But there is every indication that Japanese officials plan to rebuild the area's livestock sector and the infrastructure that supports it. "The Japanese are proud of their livestock production and seem to be determined to keep their livestock farms going," says Hart.

Most of the livestock in northeast Japan survived the disasters and still need feed. "We don't see any indication of a large depopulation of livestock in the affected area," says Erickson. "Feed is needed immediately because Japanese farmers typically keep only a limited supply of feed and grain on hand."

Feed mills collaborating, coordinating feed production to meet needs

According to USGC's Tommy Hamanmoto, "The resumption of reliable and normal feed delivery to these farms is critical to the health and welfare of the animals. Moving the market-ready animals off the farms and getting them to market is also being hindered by road conditions and lack of fuel."

Feed mills are working together to provide feed for livestock farms. While it is unclear how long the recovery process will take, Japan has a strong agricultural economy, resilient determination and usually recovers from outbreaks of disease and from disasters, he notes.

Japan will need to import more meat to help feed its people

While Japan's livestock production is recovering, Japan may end up buying more processed meat products like pork and beef, from the U.S., says Hart. Japan was the second largest buyer of U.S. pork in 2010, buying $1.65 billion worth, and was a leading buyer of beef with almost $640 million in purchases.

Phil Seng of the U.S. Meat Export Federation says Japan's meat purchases, especially pork, could increase in the coming months to fill the void created by the damage to Japan's livestock production. Also, there are some concerns about the domestic food supply because of radioactivity released by the crippled nuclear power plants. "Japan has traditionally been a large buyer of U.S. pork and that is likely to continue," says Seng. "However, beef is likely to continue to face some restrictions."

Despite protests from Washington D.C. and U.S. cattle producers, Japan continues to restrict imports of beef from the United States to beef from cattle slaughtered at 20 months of age or younger because of concerns about BSE. There has been no indication from Japan's government that the current earthquake disaster will change that policy. "However, even with these restrictions continuing, Japan will need a lot of beef," says Seng.

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