August 27, 2004

 

 

US-Japan Beef Trade Likely To Remain Closed For 2004
 

Japan's lucrative market for U.S. beef, ruptured by mad cow disease worries, is likely to remain closed for the rest of this year, U.S. meat industry officials said on Thursday.

 

A relaxation of Japan's ban on U.S. beef has been delayed by continuing disagreements among Japanese ministries and politicians. The issue remains whether all slaughtered cattle in both countries must be tested for mad cow disease before beef can be marketed in Japan.

 

"As I heard yesterday, there is not going to be any change in the Japanese (beef) markets now until after the first of the year," said Larry Pope, president and chief operating officer of Smithfield Foods Inc., the fifth-largest U.S. beef producer.

 

Pope made his remarks to Wall Street analysts during a conference call that focused mainly on Smithfield's quarterly earnings.

 

A Japanese government source told Reuters that "tough negotiations" were ongoing with the United States over bilateral beef trade. The official said it was impossible to pinpoint when trade might resume.

 

Japan had been the No. 1 importer of U.S. beef, buying about $1.4 billion worth last year. Tokyo banned the meat after Washington announced the first confirmed American case of mad cow disease on Dec. 23 last year.

 

"In putting two and two together in terms of when USDA is going to go back to Japan and how long it is going to take to make changes, you come up pretty close to the end of the year before trade might resume," a U.S. industry official said.

 

Japan has insisted that U.S. beef shipments could resume only after the United States agreed to test all 35 million cattle slaughtered each year. The USDA has rejected the demand, saying its newly-expanded testing of more than 200,000 cattle through the end of next year was adequate.

 

Recently, Japan said it would consider relaxing its universal cattle testing policy to exclude very young cattle believed to be at little risk for mad cow disease. But Japanese officials have not decided on a cutoff age, according to U.S. and Japanese officials.

 

U.S. Agriculture Secretary Ann Veneman told reporters on Thursday there were "still a number of details to work out" with Tokyo before beef trade could resume. "We are confident we will continue to make progress in opening the market, hopefully very soon."

 

U.S. industry and Japanese officials state that the next step is a report by Japan's food safety commission on cattle testing. That report is expected in early September.

 

The report could clear the way for USDA officials to wrap up a deal in Tokyo. But Japan would still have to go through regulatory changes to relax its testing regime, which could take a month or two, according to the Japanese government official.