October 26, 2007

Japan's beef wholesale market strong but export trading slow

Japanese wholesale prices for Australian beef lifted again this week, as supply concerns started to penetrate the market, according to the Meat and Livestock Australia (MLA).

Export trading, however, remained slow as buyers were reluctant to commit themselves currently.

Loin cuts were particularly strong in the wholesale market, with chilled grass tenderloin rising 150 yen from last week to 3,025 yen/kg ( 14 percent above last year).

Meanwhile, Cargill's plant in Kansas was hit with another import suspension from Japan this week, the second in six months due to the discovery of tendons that were not included in the required USDA documentation.

Imports from US to Japan had reached close to 4,000 tonnes in August, up 8 percent from July and at a fifth of pre-ban levels in 2003. 

US volume is expected to fall in coming months, as fewer cattle under 21 months becomes available. Talks to lift the 21-month requirements between the two governments were ongoing but have not yielded results.

Meanwhile, Japanese beef production in 2007/08 (Japanese Financial Year, April to March) is likely to remain stable, with no major change from the last year's volume of 346,253 tonnes.

Slaughter numbers in the first half of 2007/08 JFY (April 07 to September 07) were firm, with both Wagyu steer and F1 categories exceeding the previous year by 1 percent and 6 percent, respectively. A similar trend is forecast for the reminder of the financial year, with dairy steers also increasing. However, overall growth of the volume is expected to be modest, as slaughter of female cattle will likely to be reduced, according to the Agriculture and Livestock Industries Corporation of Japan).

As of 1 February 2007, the Japanese cattle herd stood at 2.81 million head - up 2 percent on 2006.