Prospects for Japan meat imports had looked better

Prospects for Japan meat imports had looked better : Prospects for beef and pork exports to Japan had been improving ahead of the earthquake and tsunami, lifted by the impact of disease outbreaks on domestic production.

US Department of Agriculture attaches in Tokyo, in a report filed the week before the quake struck, raised their estimate for Japan's imports of pork to 1.21m tonnes, and of beef to an eight-year high of 722,000 tonnes.

Japan is the top pork importer, and second-ranked buyer of foreign beef.

Indeed, prices of both cattle and hogs have, like those of grains, fallen heavily in Chicago on the prospect of lower Japanese purchases, falling exchange maximums on Tuesday.

American vs Aussie

The attaches' revisions, published late on Tuesday, reflected continuing strong trade after "an increase in imports that was much higher than was initially anticipated".

US beef imports soared 32% to 128,265 tonnes last year, gaining market share against Australian supplies, for which prices have been inflated by a strong currency, as well as competition for livestock in the domestic market from farmers rebuilding herds following pasture-reviving rains.

"Entering into 2011, there are few indications that the strong Australian dollar or the high price of Aussie beef will soften," the attaches said in a report.

"American beef will remain a favourable substitute for Aussie beef in 2011."

'Prolonged recession'

Japan's overall meat consumption was expected to remain "steady" in 2011, amid "signs of a prolonged recession".

"With deflationary trends still persisting, Japanese consumers are generally expected to continue to keep their spending to a minimum, and consumer demands for meat will continue to concentrate on less expensive cuts," the briefing said.

However, a foot-and-mouth outbreak in Miyazaki, Japan's main livestock and poultry producing state, had failed to dent consumer demand.

Indeed, firm wholesale prices of domestic beef, and restaurant meat promotions, had spurred demand.

Bird flu

Meanwhile, chicken prices have risen this year after an outbreak of bird flu, also concentrated in Miyazaki, which led to 1.73m birds being, in the attaches' word, "depopulated".

"Although outbreaks have turned sporadic in recent weeks and most movement restrictions are being lifted, chicken meat prices have reportedly soared," the report said. "The situation has created a temporary demand shift in favour of red meat".

Import prospects for beef and pork had also been boosted by prospects of small falls in domestic production of both meats. source www.agrimoney.com... For the latest updates PRESS CTR + D or visit Stock Market news Today

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