Meat Export Federation teams with Nebraska to boost beef exports to Japan

When the Japanese market was closed down to U.S. beef exports in December 2003, it impacted the domestic beef industry, including Nebraska's beef producers. Japan had been Nebraska's leading market for beef exports.

More than four years later, there are still restrictions on U.S. beef exports to Japan. In an effort to capture a larger share of the Japanese beef market, Nebraska's beef industry has teamed up with the U.S. Meat Export Federation.

"The loss of the United States' No. 1 export market for beef was a huge blow after BSE (mad cow disease) was discovered in this country in December 2003," said Philip Seng, USMEF president and CEO.

Seng said that while the Japan market partially reopened two years later with the acceptance of beef from cattle 20 months of age and younger, the limited number of age-verified cattle reduced U.S. beef exports to Japan in 2007 to less than 9 percent of the peak volume and roughly 13 percent of the peak value reached earlier in the decade.

"The challenges facing the U.S. Meat Export Federation (USMEF) are how to rebuild as much of the Japan export volume as possible and maximize the value of beef exports while utilizing a much smaller fraction of the cattle herd," Seng said.

He said understanding that the bulk of U.S. beef exports to Japan before December 2003 consisted of 12 cuts of meat, USMEF devised a strategy and research program to develop 17 new beef cuts that would appeal to Japanese consumers and help increase volume sales.

"This collaborative program, developed with the support of the USDA and our industry partners in Nebraska, is helping the U.S. beef industry get a bigger return on its investment in Japan," Seng said.

With financial support from the U.S. Department of Agriculture (USDA); Nebraska Beef Council, Nebraska Corn Board and Nebraska Department of Agriculture; as well as research support from the University of Nebraska-Lincoln and additional assistance from Colorado State University, USMEF embarked on a program a few years ago that is yielding substantial results in Japan and offers promise in other export markets as well, Seng said.

He said that with the new beef cuts program in full operation in 2008, beef export statistics are painting a positive picture.

According to the USMEF:

-- Export volumes of U.S. beef to Japan in April 2008 jumped by 93 percent over totals from the prior year, while volumes in May 2008 were 72 percent higher than 2007 totals.

-- May's volume of 7,683 metric tons (16.9 million pounds) was the highest since December 2003.

-- For the first five months of 2008, beef exports to Japan were up 58 percent to 24,193 metric tons (53.3 million pounds) and 53 percent in value to $125.2 million.

Seng said that while some of the increased volume can be attributed to increasing numbers of Japan-eligible, age-verified cattle, "That has been offset by the delisting of several key U.S. beef plants that had accounted for a significant amount of exports to Japan."

He said that these age-verified cattle come at a premium price, and the key for U.S. beef processors is to recover the cost of these cattle by selling more cuts and a higher percentage of the carcass.

"So when only a fraction of all beef cattle are eligible for use in export products to a key market like Japan, we need to utilize as much of the beef as possible for products that will appeal to a customer base that is very precise and demanding," Seng said.

He said the effort has had a major impact on the number of retail outlets that carry U.S. beef.

"When U.S. beef shipments to Japan resumed on a continuous basis in July 2006, approximately 8,000 retail outlets were carrying U.S. beef," Seng said. "Since the alternate cuts campaign kicked into high gear at the start of 2008, that number has soared to more than 10,500."

Seng also said the number of companies carrying U.S. beef has jumped from about 260 at the end of 2007 to nearly 300 currently.

"Nebraska is helping the U.S. beef industry get a bigger return on its investment in Japan," he said. "As we increase our penetration in the market, we are confident that both the volume and value of U.S. beef exports to this key trading partner will continue to grow."