FBA Issue 5: November / December 2005
Tracing demand in the Japanese market
by Yoshi IWAMOTO
FEED demand in Asia's richest country has declined ever since 2001. In September of that year, imports of dairy cattle and beef came to a standstill after the first case of BSE was discovered in a Holstein dairy cow in Japan's Chiba prefecture. Domestic feed demand rose in the fiscal year of 2002 (April 2002 to March 2003), as cattle which could not be exported added to local farm inventories.
Since FY 2003, however, demand for animal feed in Japan has continued to slide. Total feed demand in FY 2004 amounted to roughly 25.14 million tonnes of total digestible nutrients, a 1.4 percent drop from the previous year. The self-sufficiency ratio for animal feed, however, largely improved. In FY 2004, this ratio for domestic feed was 25.1, a 1.7 percent year-on-year increase, while that for concentrated feed moved up 1.4 percent to reach 10.8 in that year. Bucking the uptrend was roughage or coarse feed, which fell 11 percent from the previous year to a ratio of 74.5.
Price trend, imports and exports
After peaking in FY 1988, production of compound and mixed feed gradually declined as activities in domestic livestock breeding in Japan waned. An exception was the slight increase in feed production in FY 2001.
Compound and mixed feed production in FY 2004 was 23.918 million tonnes, 2.8 percent lower than the previous year, as record summer temperatures impacted livestock farming and animals were affected by heatstroke. Feed production by livestock sector was as follows: 27 percent for layer feed, 15 percent for broiler, 25 percent for hog, 17 percent for beef cattle and 14 percent for dairy cattle. Production of hog feed in April to June 2005 exceeded the previous fiscal year by 1.5 percent.
Clearly, feed prices rise or fall according to movements in the global commodities market, ocean freight rates, exchange rates and free competition among feed mills. Weather conditions, like the drought in the northern Great Plains and Midwest of the US between 1988 and 1990, affected the country's major soy and corn growing belts, forcing down global feed output. An export prohibition on corn levied by China in the mid-90s also reduced available supplies in the US and global corn market. As a result, global prices for feedstuff soared, as did prices for compound feed.
This is an excerpt, full versions are only available in FEED Business Asia. For subscriptions enquiries, e-mail email@example.com