Japan to Resume U.S. Beef Exports Halted by Mad Cow (Update5)
 
 
(Note: As much work as the South Dakota StockGrowers Association and R-CALF USA have done to get this market reopened, and the 'media' fails to mention either. As usual, the real heroes get no mention, and this includes America's ranchers and farmers. No word of praise is given them below, but the NCBA, Cargill and Tyson are all given space.)
 
October 23, 2004
 
By Hector Forster (Tokyo, Japan) hforster@bloomberg.net 
 
Editor: Peter Hannam phannam@bloomberg.net 
 
U.S. beef exports valued at more than $1.7 billion last year will resume in a matter of weeks after Japan agreed to ease a 10-month ban on the meat prompted by a lone case of mad cow disease in Washington state. 
 
Japan will allow beef imports from cattle under 20 months old, U.S. Department of Agriculture Undersecretary J. B. Penn told reporters in Tokyo after three days of talks between the two countries. Full beef trade may resume after a review in July, he said. U.S. officials tomorrow are heading to South Korea and Taiwan for negotiations on reopening those markets. 
 
Japan, the biggest overseas customer for U.S. beef, and more than 40 other nations suspended imports of the meat in December 2003 after the government announced the first case of mad cow disease in U.S. history. The import bans threatened more than $3.8 billion in annual U.S. exports and eroded profit for beef producers such as Tyson Foods Inc. and Cargill Inc. 
 
"This agreement is kind of the gateway to all the other markets that haven't opened yet,'' said Gregg Doud, an economist with the National Cattlemen's Beef Association, who said he expects Korea, which bought more than $500 million in U.S. beef in 2003, to resume purchases once Japanese shipments resume. "The Koreans have signaled for some time that they were waiting on the U.S. and Japan,'' he said. 
 
$1.7 Billion in Imports 
 
Japan purchased more than $1.7 billion worth of beef and beef products in 2003, according to a statement today from the U.S. Department of Agriculture. The U.S. Meat Export Federation put the figure at $1.5 billion. Until now, Mexico, the second-biggest buyer of the meat, had been the only major U.S. trading partner to resume purchases. Korea is the third-biggest overseas customer for U.S. beef while Taiwan is the sixth largest. 
 
"We're talking here a matter of weeks'' before Japan begins importing some U.S. beef, Penn said. "We are very eager to once again be able supply high-quality, safe beef products to Japanese consumers.'' 
 
Beef trade may expanded once procedures for confirming the age of cattle that qualify for import are reviewed with participation from the U.S., Japan and World Health Organization and other experts in July 2005, Penn said. 
 
Under the agreement, Japan will also be allowed to resume beef exports to the U.S. from cattle under 20 months old. The U.S. banned beef from Japan after that country found the first of more than a dozen cases of mad cow disease in September 2001. Japan had been shipping between 70 and 100 tons of beef, mostly premium Kobe beef, annually before the ban. 
 
Exports account for about 10 percent of total U.S. beef production, with Springdale, Arkansas-based Tyson Foods being the biggest shipper, followed by Wayzata, Minnesota-based Cargill. 
 
'Taiwan Looks Good' 
 
Taiwan is also expected to reopen its markets shortly, said Lynn Heinze, a spokesman for the Denver-based U.S. Meat Export Federation. Taiwanese officials completed a review of U.S. safety standards last week and the island nation expects to host a technical team from the U.S. in the next few weeks, he said. "Taiwan looks pretty good,'' Heinze said. 
 
NCBA's Doud said that while he expects cattle futures in Chicago to rise Monday, he doesn't see a return to last year's record wholesale prices, which hit $2.01 a pound last October, driven by strong domestic demand and tight animal supplies. 
 
"The vast majority of our fed cattle are between 15 and 24 months so we don't see this as an impediment to supply,'' he said. 
 
Some companies that already can verify the age of the cattle they slaughter, such as Denver-based Creekstone Farms Premium Beef LLC, which prior to last December's ban exported a majority of its beef to Japan, could benefit quickly from reopened markets, Doud said. "Those that have this source verification will have an advantage,'' he said. 
 
Universal Testing Demand 
 
Japan's Agricultural and Health Ministries, which previously demanded universal cattle testing for mad cow, proposed earlier excluding cattle younger than 20 months old. Scientists say there's no evidence that cattle that young carry the disease, which is formally called bovine spongiform encephalopathy and has a fatal human variant. 
 
The U.S. refused to test all slaughtered cattle. Instead in June it began an 18-month BSE surveillance program targeting some 270,000 mostly "high-risk'' animals to determine if the disease had spread in domestic herds. The Agriculture Department said that as of October 22, it tested 85,812 head of cattle without a further BSE case. The dairy animal originally found with the disease had been born in Canada. 
 
Japan, meanwhile, may say it found its 15th case of mad cow disease in an animal found in Mie prefecture, Kyodo News said, citing local officials. Last week, the government confirmed its 14th case. Test results are expected as early as Tuesday, Kyodo said. 
 
Scientists have said humans who eat certain parts of animals infected with BSE may contract variant Cruetzfeldt-Jakob Disease, a similar brain-wasting ailment that has been blamed for 142 human deaths in the U.K. since 1990. 
 
Copyright 2004, Bloomberg LP