June 21, 2007

Japan's May cattle price drops

High feed costs prompting extra cattle offload in feedlots has pulled down Japanese cattle prices in May.

Japan's Agriculture & Livestock Industry Cooperation (ALIC) reported an increase in numbers and a subsequent price decline in all three major categories - Black Wagyu (Kuroge Washu), F1 and dairy cattle. The average price of F1 fell 6 percent compared to the previous month, to 239,000 yen (US$1,933) per head or 14 percent below the same month last year. Black Wagyu prices also eased to 492,000 yen (US$3,980) per head or 4 percent below April 2007 and down 2 percent on the last year, going under the 500,000 yen (US$4,044) level first time since July 2006.

The downward trend began in January this year, with many feedlots under pressure from increasing feed costs and falls in average carcass prices. During the period January to May 2007, the price of F1 steer B3 grade carcass were 7 percent lower than the same period last year.

Despite speculations of higher prices during Japanese autumn (September onwards), others are less optimistic as US beef imports are about to make a comeback and global feed prices remaining high.