A new trade agreement between the United States and Japan should be a boost to the Grand Island and Nebraska economies.
One of the areas where the trade agreement will have a positive impact is with beef trade.
JBS, Grand Island’s largest employer, is starting a $95 million expansion and improvement project. JBS Plant Manager Zachary Ireland said the expansion project will create a 107,000-square-foot facility.
He said the project will improve animal handling facilities, include temperature-controlled harvest floor, reconfigure facility designed to improve employee experience and safety, address food safety and product quality, and will result in energy savings (electricity and gas) and improved water treatment processes.
Ireland said the construction completion is scheduled for March 2021. Plant operations will continue through construction.
He said the plant upgrade will keep it competitive and operational enabling JBS Grand Island to continue sourcing beef within 150 miles of the plant.
Other benefits include transportation improvements with less staging on streets and more efficient flow of trucks; employee safety as the design of the kill floor has been done with updated employee ergonomics with improved washes and air flow resulting in a safer work environment and food safety; and temperature controlled kill floor with centrally controlled heating and air conditioning.
Ireland said the improvements will allow for higher product output to ensure Grand Island remains the top export plant in the U.S. He said 20 percent of the products processed at the plant are shipped to more than 30 countries.
Japan is a leading country for U.S. and Nebraska beef and pork exports, said Dan Halstrom, U.S. Meat Export Federation president and CEO.
“The U.S. beef industry is extremely excited at the prospect of lower tariffs in Japan, as 38.5% is the highest rate assessed in any major market,” Halstrom said. “As we’ve seen in Korea, where the tariff rate was once 40% but has been reduced by more than half, lower tariffs make U.S. beef even more affordable for a wider range of customers. While the agreement still needs parliamentary approval in Japan, importers are already enthused and preparing for long-awaited tariff relief.”
Steve Nelson, president of the Nebraska Farm Bureau, said the deal represents a “huge win for Nebraska’s farm and ranch families.”
“When implemented it will put them on a level playing field with some of our largest competitors that are currently participating in the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CP-TPP),” Nelson said. “More specifically, Nebraska’s beef, pork, dairy, and ethanol producers, will all greatly benefit from this agreement which significantly reduces or eliminates tariffs and increases overall market access to this important strategic ally and trading partner. We are hopeful this agreement will provide a long-term economic boost and is a sign of more good things to come on the trade front.”
Sen. Deb Fischer, a member of the Senate Agriculture Committee, also said the agreement between the U.S. and Japan is a victory for Nebraska’s farmers, ranchers and ethanol producers.
“By securing reduced tariffs on a variety of exports like beef, pork and ethanol, this agreement expands markets for Nebraska’s great ag products,” she said. Under these trade agreements, Fischer said Japan will eliminate or lower tariffs on American beef, pork, wheat, ethanol, and more, as well as expand digital trade between the two countries.
According to the USMEF, the recent U.S. and Japan agreement will bring tariffs on U.S. pork in line with those imposed on major competitors. In August, USMEF said export results “illustrated the pressing need for tariff relief. August volume was down 19% to 28,240 mt, while value fell 18% to $120.1 million. Through August, exports to Japan trailed last year’s pace by 6% in both volume (250,540 mt) and value ($1.03 billion). U.S. exports of ground seasoned pork to Japan have been hit particularly hard by the tariff gap (20% compared to 13.3% for the European Union and Canada), with Japan’s imports through August falling by 28% — nearly $60 million — compared to last year.
Similar to pork, USMEF said the U.S. beef industry looks forward to gaining tariff relief in leading market Japan, where August exports slipped 15% from a year ago to 28,646 mt. Value was down 22% to $164.3 million, although it is important to note that exports in August 2018 were a post-BSE record $209.3 million. For January through August, exports to Japan were 3% below last year’s pace in volume (217,698 mt) and 4% lower in value ($1.36 billion). Beef variety meat exports to Japan (mainly tongues and skirts) have been a bright spot in 2019, increasing 31% in volume (44,617 mt) and 18% in value ($260 million). U.S. tongues and skirts face higher duty rates than competitors’ products but are tariffed at 12.8% compared to 38.5% for U.S. muscle cuts.