February 24, 2012

At least 4.37 million chickens being raised in Aomori, Iwate and Miyagi Prefectures died after the Great East Japan Earthquake damaged and closed ports, leading to a shortage of eggs in eastern Japan.

Japan depends on imports for three quarters of its chicken feed, but the damage to the ports cut supplies to northeast Japan and the northern Kanto region. Additionally, prices for corn, which accounts for half of the feed, have jumped across the world as corn is repurposed for use in bio ethanol fuel. The earthquake revealed the fragility of import-dependent livestock farming, and the status of the egg as a low-priced commodity looks like it could change.

Six days after the earthquake, on March 17, in a meeting room at the Ministry of Land, Infrastructure, Transport and Tourism, a top executive of a feed maker warned officials of the ministry's ports bureau that "eggs will disappear from the metropolitan area." The executive sought a quick recovery of Kashima port, one of Japan's largest bases of feed imports.

In the earthquake disaster, breakwaters at import ports along eastern Japan were broken, preventing ships from docking. Feed factories' stores ran out, and northeast Japan and the northern Kanto region, which together produce around 20% of the country's eggs, took a heavy blow. According to the Ministry of Agriculture, Forestry and Fisheries, by the end of June, around 10% of the 39.61 million chickens being raised in Aomori, Iwate and Miyagi Prefectures had died. Adding in chickens in Fukushima Prefecture, which was heavily affected by the nuclear disaster, and non-reported deaths, there has been an estimate that around eight million chickens died.

According to the national agricultural cooperative Zen-noh, the volume of eggs brought into Tokyo in mid-March was 87% less than in the same period of the previous year. A spokesperson from a cooperative-affiliated egg company said, "There was an unprecedented doubling of insufficient supply and hoarding (by consumers)."

Zen-noh's egg price in April was JPY245 (US$3.04) per kilogramme, around 40% higher than the same period the previous year and the highest price in the last six years.

Japan uses 10 million tonnes of feed-use corn a year and entirely relies on imports for its supply. Almost 90% comes from the US. Adding in corn used for human food and other purposes, Japan imports 16 million tonnes, accounting for 17% of the world trade volume of corn. Since around 2006, when the US began advancing the use of corn in making bio ethanol fuel, the price of corn has jumped. The average import price of corn for the years from 2006-10 was 1.5 times that of the period from 2001-05.

Furthermore, China, which had been pursuing self-sustainment for corn, began major imports of it in 2009. The USDA estimates that from September of last year through August of this year, China's imports of corn will reach four million tonnes, over three times the amount of the previous year-long period.

Currently, the influence of rises in feed prices on egg prices in Japan is small, as improvements in efficiency and a strong yen have absorbed the impact. However, there are members of the egg-raising industry warning that they are near the limits of their ability to compensate for risen prices.

Japanese consumption of eggs is 325 a year per person, second only to Mexico. Of that, 96% is domestically produced, but counting in feed, on a calorie-basis the self-sufficiency rate for eggs is 10%. Associate professor Seiji Nobuoka of Tokyo University of Agriculture warns, "The earthquake disaster showed anew that the Achilles heel of Japan's livestock industry is its dependence on imports for feed. In the long term, a price increase for eggs is unavoidable."