090303 U.S. Beef Sales to Japan May Rise 35%

March 2, 2009

(Bloomberg) -- U.S. beef sales to Japan, the third- largest importer, may increase 35 percent this year as the stronger yen reduces prices and boosts demand.

Exports, including meat from internal organs, may rise to about 100,000 metric tons from 74,000 tons last year, Philip Seng, president and chief executive officer of the U.S. Meat Export Federation, said in Tokyo today. The yen jumped 23 percent against the dollar in 2008.

Japan's purchases of U.S. beef are poised to rebound after the nation eased a ban on imports prompted by the discovery of mad-cow disease in Washington state in 2003. Imports last fiscal year were 85 percent below levels before trade was disrupted, according to Japan's Ministry of Agriculture Forestry and Fisheries.

"We are still required to provide cattle under the age of 20 months, and we see this as a limiting factor on our exports," Seng told reporters. "We are hoping our two governments will be able to resolve this issue in the very near future."

The U.S., the world's largest beef producer, has asked for the age limit to be removed, in line with a recommendation from the international animal health organization.

Cattle futures for April delivery rose on Feb. 27 in Chicago after the USDA reported the previous day overseas demand for U.S. beef is increasing. Meat exports reached 57,600 tons (127 million pounds) this year through Feb. 19, up 3.9 percent from a year earlier.

Value Rises

U.S. beef exports to Japan, including internal organs, known as variety meat, surged 59 percent in 2008 from a year earlier. Shipments by value rose 57 percent to $383 million, according to the federation.

"Taking advantage of a stronger yen, we are projecting close to 100,000 tons of beef exports" in 2009, Seng said.

Japan's total beef market contracted 0.6 percent in 2008 from a year earlier to 822,598 tons, of which imported meat accounted for 458,556 tons or 56 percent, the federation said. Australia was the largest overseas supplier with a 44 percent market share, followed by the U.S. and New Zealand.

Japanese imports of American beef, excluding internal organs, have plummeted about 85 percent since 2003 to about 34,000 tons in the year ended March 31, 2008, according to data from Japan's Ministry of Agriculture, Forestry and Fisheries.

The U.S. was the largest supplier of pork to Japan, the world's biggest importer of the meat, for a fourth year in 2008, the federation said. Shipments surged 26 percent to 452,000 tons and rose 34 percent by value to $1.55 billion, it said.

Japan's total pork market grew 3.4 percent to 1.69 million tons in 2008, of which supplies from overseas represented 817,117 tons or 48 percent, according to the federation. Canada was the second-largest supplier ahead of Denmark.

Mad cow disease, otherwise known as bovine spongiform encephalopathy, has been linked to more than 150 human deaths worldwide. Eating meat from BSE- infected animals has been tied to Creutzfeldt-Jakob disease, an incurable human illness that destroys brain tissue.