February 7, 2008

 

Japanese farmers reason on further beef price hikes

 

 

Japanese beef prices - already the world's highest - are about to get even higher, the country's farmers said Wednesday, warning that livestock feed prices have shot up from the global rush for ethanol.

 

But the farmers pleaded for public understanding from consumers, saying they face extremely difficult times.

 

"We are facing a crisis that is endangering our very survival," said Toshihiko Baba of JA Group, the nation's top agricultural organization. "This is unprecedented in being unlike any other feed price problems we have experienced."

 

Baba and the other farmers said they will start a public campaign of their plight Saturday, passing out 25,000 free packages of tissue paper on Tokyo streets with leaflets that explain why meat prices must go up.

 

The cost of feed in Japan has raised by about a third over the last year, mainly because of a rise in corn prices in the US, the world's leading producer of corn. Corn is a key ingredient in ethanol. Demand is growing for ethanol, a kind of biofuel, because of soaring oil prices.

 

The farmers told reporters at JA's Tokyo office that the price-setting system here makes it difficult for prices to reflect feed costs.

 

Japan is notorious for high prices such as melons which sell for as high as Y10,000 (US$90) each.

 

Although some prices, such as bread and instant noodles, have climbed from ethanol demand, Japanese meat prices, set in negotiations with chain stores, have stayed roughly the same in recent years - Y850 for 100 grams, or about Y3,900 a pound.

 

That's about a tenth of the cost of US beef, which has been creeping up lately on higher ethanol prices. Beef prices in the US last year rose about 4 percent from the previous year, and pork prices are up 2 percent. Retail beef prices vary, but beef costs about US$4 per pound in American stores.

 

To account for the rise in feed costs, the price of Japanese beef will need to go up Y15 per 100 grams, the farmers said.

 

"We are going straight to the consumer to gain their understanding," said Shigeru Nishibaba, an organization official.

 

Over the years, Japanese farmers have been dwindling amid international competition and the need to switch to large-scale ranches and farms to cut costs.

 

The number of beef cattle farms has nose-dived over the last four decades to 86,000 nationwide from 1.16 million, according to JA. Japan now has 7,800 pork-raising farms, down from 714,000, and 26,000 dairy farms, down from 360,000 in 1966.

 

But the farmers stressed the need to keep food production alive in Japan to ensure food safety.

 

Concerns about Chinese imports have been growing lately after recent large-scale food poisoning from dumplings that had been laced with massive dosages of pesticide. Police suspect foul play, but there have been no arrests.

 

The agricultural group said it was determined to drum up consumer support for their industry.

 

At Saturday's event, a former star sumo wrestler will demonstrate "chanko," a dish of meat and vegetables cooked in soup famous in the traditional sport.

 

The farmers also demanded the government enact new measures to respond to the feed crunch. The funds for hedging against falling meat prices and fluctuating feed prices of the past are inadequate for the latest crisis, they said.

 

In 1960, Japan produced almost all the beef, pork and dairy products the nation consumed. In recent years, Japan has been importing about half of the beef and pork, as well as about a third of the dairy products.

 

"We want to continue to provide a stable food supply," said Nishibaba.