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US beef exporters claw back market share in Japan

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US beef supplies are clawing back market share in Japan, even without the completion of the Trans-Pacific Trade Patnership, government officials said.

"Tight supplies of Japanese and Australian beef should continue to create opportunities for US beef in the Japanese market," the US Department of Agriculture's Tokyo bureau said.

The bureau raised its forecast for Japanese beef imports by 15,000 tonnes, to 745,000 tonnes.

This level of imports has only been exceeded once, back in 2011.

Winning back lost markets

US beef has been losing market share in Japan, the world's third-ranked beef importer, since 2003, when restrictions were bought in following the detection of BSE.

These restrictions have eased since 2013, but since 2015 there has been stiffening competition thanks to a Japanese trade deal with Australia, which gave supplies from that country a significant tariff advantage over those from the US.

And US beef exporters were dealt a blow this year when the US president officially withdrew from the Trans-Pacific trade partnership, dashing their hopes for a level playing field with Australian producers.

Slowing production

But with Japanese import demand at near-record levels, ample US supplies are winning market share.

The higher imports are the result of a prolonged slump in Japanese beef production.

Japanese beef production is seen easing in 2017 to 460,000 tonnes, thanks to lower slaughter.

Aside from one year in 2001, this would be the lowest level of production since 1980.

The Japanese beef industry is still dealing with a shortage of cattle, thanks to a lower calf crop back in 2014 and 2015, which has reduced slaughter numbers.

The bureau forecast total beef consumption flat year-on-year, at 1.25m tonnes.

Brand-launches improve long term prospects

The US is seen as the big beneficiary of increased Japanese imports, thanks to ample demand, with exports from the main competitor Australian restricted due to herd-rebuilding there.

The total US market share is seen climbing to 42%, up four points, while Australian market share falls three points to 51%.

Last week Steiner Consulting noticed the strength of US exports to Japan, as well as South Korea.

"Shipments to Japan in the last four weeks have averaged 1174 tonnes (33%) more than a year ago while shipments to South Korea have averaged 499 tonnes (22%) more than last year," Steiner Consulting said.

The bureau also noted "additional tailwinds," for US beef prospects in Japan, thanks to the launch of a number of US brands.

"With marketing strategies appealing to the story behind the product and exacting product specifications, which can include grade, breed, finishing weight, and even specific feeder calf suppliers, Japanese meat importers have made a significant investment in expanding future US beef import volumes," the bureau said.

"If these brands succeed, Japanese retailers and food service outlets could generate additional demand for high-value US chilled cuts in 2017 and beyond.

By William Clarke

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