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(Last updated: 30 Sep 2008)
Trends and opportunities
The market
Beef
Australian beef accounts for around 50 per cent of the beef consumed in Japan. This success is supported by quality, price and reliability particularly after the BSE incidents and other animal diseases came to light. Also, various individual and joint marketing promotions by meat companies, industry bodies and the government have further helped cement Australia’s enviable reputation for beef.
In Japan, beef is consumed by a wide range of end users. From Japanese sukiyaki/shabu shabu restaurants (using well marbled middle cuts including Wagyu beef) and Korean BBQ restaurants (short ribs, other cuts including variety meat such as tongue) to a varied range of users in the food service sector (particularly big demands for lean meat), to table meat for yearling beef, grass fed and grain fed beef and the retail sector for steaks, hamburgers, stew and curry use and others for home consumption.
In the dairy cattle industry, intensive farming practices have impacted on the fertility and mortality of Japanese cattle in recent years. Combined with the high costs of rearing calves, imports are an attractive option. The high cost involved in rearing Wagyu calves has spawned Wagyu artificial insemination programs around the world. Calves are usually transported to Japan by air at around eight months of age. They are then fattened for market using traditional Japanese methods.
Pork
Japan is by far the world’s largest pork importer. Over 600,000 tonnes are imported annually and account for over 40 per cent of the country’s pork requirements. Pork is the most popular meat eaten in Japan and nearly all of it is imported as boxed boneless skin-off cuts, either frozen or chilled.
Most of the imported pork is used in meat processing for bacon, ham and other small goods. Much of this is sourced from American, Danish, Canadian and Mexican suppliers. For table meat, Japanese domestic pork and imported loin cuts are the major items. It should be noted however that due of the sensitivity to boar taint, the industry only takes pork from female or castrated carcasses.
Japanese pork dishes are different from what is seen on the tables in Australian restaurants and homes. Loin is served boneless (so larger muscle size is needed for plate cover) and bacon is made from belly only, and no loin (so again larger meat is needed). For the Japanese market, a bigger animal is needed, around 110–125kg at live weight (the size of animal should be checked with your customers in Japan).
Japanese buyers prefer slightly marbled pork that has a higher colour score than Australian standards, although pork from Australia, which is primarily barley fed, is perceived to be of better quality than corn-fed US pork.
Australian exporters are well positioned to become important suppliers to the Japanese market as Australian meat has successfully established the image and reputation of being ‘clean and safe’. The Japanese Government is vigilant about restricting exposure to diseases, such as mad cow disease and foot and mouth disease.
Chicken
One interesting feature of Japanese demand for chicken is that leg meat attracts a premium over breast meat. This creates good export opportunities for several countries where breast is premium over leg. Furthermore, Japanese tend to favour boneless meat, so the costs to remove bone from leg meat need to be considered. No residual feathers and white skin is preferred by Japanese buyers.
Horse
Approximately 8,000 racehorses are bred in Japan every year. Japan is the third largest breeding country in the world after the USA and Australia. There are more than 2,000 studs in Japan; however, the majority are relatively small, with 80 per cent holding fewer than 10 mares. Ninety-six per cent of breeding takes place in Hokkaido. In order to profit from extended breeding seasons, stallions are sent between Australia and Japan.
There are a number of key developments driving the Japanese horse industry:
- Increased purchases of Australian racehorses at major sales in the USA and Europe.
- Many small breeders are in financial difficulty because of the high service fees for stallions.
- Japanese bred horses have started to race outside of Japan as the industry undergoes internationalisation.
- Improved Australian racehorse pedigrees due to stallions visiting from northern hemisphere countries means racehorse and breeding prospects are becoming more attractive to Japanese breeders, trainers and owners.
- Traditionally, Australia has not been seen as focus area for Japanese breeders. However they are now looking to Australia for new opportunities.
Some situations that may act as barriers to doing trade in Japan include:
- The lengthy quarantine procedures for live animal exports.
- Birth date and weight allowance discrepancies for the racehorse industry – there is no system to compensate southern hemisphere horses running against northern hemisphere horses that are six months older.
Opportunities
A range of opportunities exist for Australian suppliers of livestock to export to Japan:
- Beef – Wagyu calves (feeder cattle)
- Holstein heifers (breeder cattle – includes pregnant Holstein heifers)
- Pork – chilled (for retail and food service sectors) and frozen (for smallgoods manufacturing)
- Racehorses (racehorses, trained horses, broodmares, yearlings, stallions, Arabian and or Anglo-Arabian horses)
- Leisure riding horses
The major opportunities for Australian exporters are in the two key areas of chilled or frozen beef with grass or grain fed product. There is also demand for processed and value-added products in the food processing and food service industries.
Competitive environment
Australia is the number one supplier of chilled beef to Japan and the number two supplier of frozen beef, behind the USA. Australia supplies beef in ‘full set packs’ while the USA supplies particular parts, such as chuck roll, rib eye roll, and steak ready.
Imported frozen pork is used mostly by the smallgoods manufacturing industry, and Danish product has the dominant position in this segment. Imported chilled pork comes mostly from USA and Canada, and increasingly from Australia.
About 50 per cent of all the stallions in Japan are imported mainly from the USA.
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