USA

US to lose its stake in the Japanese meat market unless it secures a trade deal

USMEF Economist Erin Borror considers Japan to be the leading value destination for both US beef and US pork, but the situation will change unless the United States secure a preferential trade agreement with the Asian country.

Posted on Feb 27 ,11:19

US to lose its stake in the Japanese meat market unless it secures a trade deal

Erin Borror, economist at the US Meat Export Federation said during the February 22 panel discussion at the USDA Agricultural Outlook Forum in Arlington, Virginia, that, for 2018, US beef and pork exports to Japan are expected to reach $2.1 billion and $1.65 billion, respectively, when year-end data is available.

Borror warned that the competitive terrain in Japan has gotten steeper for U.S. red meat due to Japan’s preferential trade agreements with Australia, the European Union, Canada, New Zealand, Mexico and Chile, and this situation will worsen unless the United States secures similar access terms with Japan.

Borror noted that U.S. beef export value per head of fed slaughter averaged a record $320.72 in 2018, up 14 percent year-over-year and shattering the previous high ($300.36) set in 2014. Japan accounts for one-fourth of this total, or $82.75 per head. The ratio is similar for U.S. pork export value, which averaged $51.46 per head slaughtered in 2018. Japan accounted for $13.18, or 26 percent of the total per-head value.

She also explained that beef and pork make up a significant portion of U.S. agricultural exports to Japan. The projected $3.92 billion in combined red meat product exports represent about 30 percent of the $13 billion in total U.S. ag exports to Japan, second only to grains and feeds.

Borror considers that without a U.S.-Japan trade agreement, potential losses for the U.S. meat industry are substantial. On a per-head basis, Borror estimates lost export opportunities for U.S. beef will reach $18.70 by 2023 and $42 by 2028. For pork, the per-head loss is projected to be $4.55 by 2023 and $7.06 by 2028.

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