July 28, 2008

Japanese feedlots are struggling with rising costs and lagging beef demand, which lead to a decline in live cattle imports.

Japan imported 24,601 head of live cattle in 2007, a drop of 4 percent from 2006, with Australia supplying 97 percent of it.

However, Japan imported only 9,200 head during January to May, down 25 percent on-year.

Rising freight rates, strong Australian dollar and high feed costs have reduced returns to Japanese cattle farmers. Average CIF price of Australian cattle imported during the first five months of 2008 rose 8 percent from 2006 to JPY 181,234 per head.

A sluggish beef demand and decline in Japanese wholesale carcass prices also quieted the trade. Average carcass price for F1 steer B3 grade and B2 grade during January to May 2008 fell 11 percent and 12 percent to JPY 1,295 per kg and JPY 1,091 per kg, respectively, from 2006.

US$1 = 107.84 JPY