July 6, 2004

Japanese Beef Demand Fell After Discovery Of BSE

Ever since 11 BSE-infected dairy cows were discovered in Japan since 2001, U.S. beef exports to Japan have reduced. This is despite the United States having remained free of BSE until December 2003.

After the announcement of the first Japanese BSE case on September 11, 2001, beef consumption in Japan dropped by 60 percent, and ending stocks were up 41 percent at the end of that year. U.S. beef exports to Japan had averaged 90 million pounds per month during the first 10 months of 2001, but dropped 30 million pounds in November and another 8 million in December. That reduction in exports to a market that normally accounts for about 50 percent of U.S. beef exports was a major factor in the 8-percent total decline of U.S. beef exports in 2001.

Total U.S. beef exports would likely have set a record in 2002 if it had not been for a 23-percent decline in U.S. beef exports to Japan. Some U.S. beef that would otherwise have been sent to Japan was sent elsewhere. But the decline in beef exports to Japan overshadowed U.S. beef export increases of 73 percent to South Korea and 18 percent to Mexico. By mid-2002, Japanese beef consumption had recovered to within 10-15 percent of its pre-BSE levels, where it remained through 2003.

Prospects for U.S. beef exports brightened further after the May 20, 2003, when the discovery of a BSE-positive cow in Canada led to worldwide bans or restrictions on Canadian beef exports. U.S. beef filled the void in some of these markets, most notably Mexico. U.S. exports grew until late 2003, and generally were expected to continue strong into 2004. But the discovery of a BSE-infected cow in the United States on December 23, 2003, led Japan and all other major markets to immediately ban or restrict imports of U.S. beef, and the forecast for 2004 U.S. beef exports was reduced sharply.

Source:  ERS/USDA