JAPAN - Tight exportable beef supplies in Australia and the United States and the continued decline of Japanese beef production are exerting upward pressure on Japanese beef prices.
Meanwhile, Porcine Epidemic Diarrhea virus (PEDV) continued to constrain Japanese and North American pork production in the first half of 2014, leading Japanese pork processors to import large volumes of frozen pork to secure supplies and hedge against further price increases.
High prices in 2014 and through 2015 are expected to limit Japanese total beef consumption (imported and domestic) and to rebalance meat consumption towards lower-priced beef cuts and more pork / poultry.
Japanese importers should continue to face tougher competition, including from the United States, for limited global beef supplies.
Japanese frozen beef stockpiles should continue to unwind in 2014 and into 2015, further suppressing import demand. It is unclear what impact implementation of the Australia-Japan Economic Partnership Agreement (EPA) will have on the beef market in 2015, as tight Australian supplies should push up export offer prices, countering the EPA’s scheduled tariff reductions.
In addition to North American products, Japanese importers accelerated their supply diversification, buying significantly larger volumes of EU pork, and nearly triggered the pork special safeguard (SSG).
Japanese pork consumption in the first half of 2014 was flat, though as beef prices are projected to climb still higher, consumers may buy more pork in 2015 despite higher prices.
As Japanese production recovers from PEDV and frozen stocks work their way through the market, Japanese pork imports are expected to fall in 2015.
However, as Japanese and North American production begins to recover from the worst effects of PEDV, Russia’s import ban on EU pork may reinforce patterns that emerged as a result of PEDV as EU producers seek buyers for their additional exportable supply through summer 2015.
You can view the USDA GAIN: Japan Livestock and Products Annual 2014 report by clicking here.
TheMeatSite News Desk