Japan has recently announced it’s 18th confirmed case of BSE, aka “Mad Cow Disease.” This may a brilliant example of Japanese market protectionism, right up there with it’s whopping 407% imported rice tariff. Six months after American negotiators thought they had deal to resume beef exports, Japan’s $1.2 billion-a-year beef market remains closed. Canada also hasn’t been faring well, Japan is a beef market worth an estimated $160 to $240 million per year for Canadian cattle producers.
Like rice, Japanese people love beef, so why would the government still keep the doors closed on their tainted beef market? The Economist sums it up well:
Consumer safety has become a highly delicate issue in Japan. Fed up with faulty clutches, sour milk, mislabelled meat and cracked nuclear reactors, the instinctive response of consumer groups these days is to flex their muscles wherever possible and to resist stoutly any hint of political interference. This attitude will no doubt prove helpful in many ways, by encouraging lax firms and regulators to shape up. But it can prove awkward in cases, such as the beef issue, in which Japan’s famously risk-averse public figures decide that it is better simply to ban something, however unnecessarily, than to incur the wrath of a pressure group.
I wonder how the cattlemen in Japan are faring. As good as their rice-farmers I bet! But then again, when given the chance: Note that Canada is still fighting to get US borders open to Canadian beef, whose market dwarfs the Japanese. Apparently no decision on that until July 27th, if not before.
Let’s tally the scores shall we?
- US = 1*
- Canada = 2 (or 3, see note)
- Japan = 18
My opinion? Don’t call the kettle black, this ain’t no rap show.
____________
*NOTE: I know this is contentious, as the cow was imported from Canada.
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Comments to this entry
Chief Wiggum
May 14, 2005
7:09 pm
But, the Canadians, Japanese and Americans cannot hold a candle to the French when it comes to agricultural subsidies and protectionist practices. Somehow, the French continued to subvert and thwart EU open market policies.
Curzon
May 14, 2005
9:28 pm
Simon World
May 15, 2005
2:52 am
The Canadian-Chinese divide on democracy, killer robots, anti-Putin mobsters, the lessons of Vietnam, and more, all on today's (abridged) Daily Linklets
Two Cents
May 16, 2005
6:29 am
The US's adamant refusal to test its beef has fueled Japanese consumer distrust of US beef. After all, when BSE was reported in Japanese cattle, it was the US who refused to allow import of Kobe beef even after each cattle was tested. The Japanese consumers are simply asking the US to test their product for safety as I'm sure Toyotas are demanded to by the US consumers. Is that too much to ask? The Japanese government is even offering to pay for the costs of the testing. Distrust grew especially after the US government crushed efforts by Kansas ranchers to test all cattle for export to Japan in order to make a "safety" brand name for its beef. Although this move was probably to keep the efforts of beef producers in the US united, it did make the Japanese suspicious. Maybe there was another motive behind it. Perhaps the US doesn't want to have its beef tested at all, in fear of the truth getting out - that BSE is already widespread in the US.
The US will probably succeed in pressuring Japan into importing untested US beef again, but it would be extremely bad diplomacy. You already have anti-US media attacking Koizumi for kowtowing to the US. This would only give them more support. Even people who normally don't take an anti-US stance are also displaying their displeasure towards the US on this issue. I've heard one say untested should be sold with stickers saying "BSE Warning "“ this beef may be hazardous to your health." The US government (and the cattle ranchers) should just agree to let the Japanese pay for the tests instead of making this into a full-blown diplomatic issue and a PR disaster. After 5 years of negative results, the tests will surely be ditched and the issue all but forgotten by the Japanese public. Shoving your product down the other country's throat using political forcing is just as protectionist as banning an import.
Younghusband
May 16, 2005
4:16 pm
I tried to track down stats on Japan's domestic cattle industry but could find none. Thus the "may" in my second sentence.
As for other countries testing, if you read the articles you will see that both Canada and the US are testing their animals, but Japan goes typically overboard and "wants everyone to test _all_ cows":http://www.cbc.ca/story/world/national/2004/01/22/japan_madcow040122.html. This is not necessary (not to mention not cost-effective), and Japan has recently admitted this by stopping testing of cattle younger than 20 months.
Though I see your point about Japan paying for testing, how would this affect the pricing of US/Canadian beef on Japanese markets? The government has to get that money back somehow, no?
Two Cents
May 17, 2005
9:18 am
Is the Japanese public going overboard? Yes. But after all the lies, deceits, cover-ups and the utterly disgraceful attitudes seen in the food industry and the government, the public has good reason to be angered beyond reason. The decision to stop testing on cattle younger than 20 months is even under attack by the media and consumers. The hype isn't the US or Canadian ranchers fault, but they have to realize that they're dealing with a public in panic, and forcing untested beef onto them is really not a good strategy. You can't talk reason to an angry mob, especially when the media is feeding fuel to the hype. I do realize that all-cattle testing on American beef (where BSE has not been found to the same extent as Europe) is irrational, unnecessary, and uneconomic. But that's not the point. The Japanese public is convinced that it is rational, necessary, and is willing to pay for them, meaning we think it's worth the extra cost if it guarantees safety. I really think the best strategy here is to let the Japanese government/consumers have our way, no matter how silly it sounds, let us bear the cost of the tests (in a way that will not affect the competiveness of US/Canadian beef on the Japanese market) and wait till we come to our senses. Already, you see that the public is becoming numb to reports on new cases of BSE, to the relief of a friend of mine who owns a yakiniku shop, so I don't see why the US should rekindle the fire.
I found some statistics in Japanese, so I'll give you a rough translation on the situation of imported beef in Japan since the ban on US/Canadian beef. In 2002, prior to all this panic, of all beef consumed in Japan, 41% was Japanese beef, and 59% was imported. Of the imported beef, US/Canadian beef comprised approximately 50% and Australian beef 45%. As I stated in my earlier post, the main rival of US beef is Australian beef, and the loss in US beef imports has been covered not by increase in Japanese beef, but by Australian and NZ imports.
This seems to present the situation for last year.
ttp://lin.lin.go.jp/alic/month/dome/2004/oct/topics.htm
Fig. 3: Bar graph showing country-based beef import.
(US: purplish red; Canada: light blue; Australia: purplish blue; NZ: pale yellow; unit of vertical axis: 1,000 tons; horizontal axis: 15.4 = Apr. 2003, 16.1 = Jan. 2004, etc. )
"According to the trade statistics by the Ministry of Finance, the monthly beef import has recovered to a -3.7% level in July 2004 relative to the monthly average for the Apr.-Dec. 2003 period, although imports from the major suppliers US and Canada are still banned. The peak seen in July 2003 is the last-minute rush to import before the enactment of a emergency tariff measure in August. With the US/Canada beef ban still in effect, Australian beef now accounts for over 90% of the imported beef. Compared to July 2003, imports from Australia and NZ in July 2004 has risen by 29.0% and 62.6%, respectively.
Fig. 4: Imports from Australia
(Purplish blue: grain-fed cattle; Purplish red: grass-fed cattle; TOP bar: July 2004; BOTTOM bar: July 2003; Unit of vertical axis: 1,000 tons )
A transition in the type of beef imported from Australia is also seen. There is a significant growth both in the total tonnage and percentage of grain-fed cattle compared to grass-fed cattle.
Saru
May 17, 2005
4:39 pm
It is correct that banning U.S. beef will only accelerate imports from other countries, but incorrect to assuming that the only "boost" to the Japanese beef would come through the production of cheap beef in Japan. Actually, the boost derives from the exact opposite effect "“ rising prices for domestic beef.
Banning U.S. beef has the effect of limiting the supply of beef available for domestic consumption. In the short-term at least, this is going to push up prices for _all_ beef, be it domestically produced or imported. Higher prices mean higher profits for Japanese cattlemen.
A report released by Consumer Life Information (hereafter, CLI) of Tokyo contains the results of two surveys measuring the prices of domestic and imported meat products in the three months following the ban. The surveys were conducted by CLI and the Ministry of Agriculture, Fisheries and Forestry (MAFF).
According to the data, prices for both domestic and imported beef rose as a result of the supply shortage. Prices peaked in February, falling slightly in March, but still remained above their January price. (Chicken prices rose slightly in February, and then fell to or below, depending on the survey, their January levels.)
Putting a chart in this thing would be a real pain, but results can be seen in Japanese here: http://www.shouhiseikatu.metro.tokyo.jp/k_joho/t_chosain/15gyuuniku.pdf
The UFJ Institute also released a report titled, "Quantitative Analysis for Economic Impact From the Import Ban on US Beef Caused by BSE."Â? I haven't had time to read the entire thing, but one of the conclusions is:
_In the short-term, it is difficult to perfectly substitute the entire amount of imported U.S. beef prohibited under the ban with domestic or Australian beef... Additionally, as a result of the supply shortage resulting from [this difficulty] beef prices have surged upward._
I unfortunately do not have time to search for more recent price data, but without coming down from my Ivory Tower, I would imagine that prices have stabilized somewhat as Aussies moved to meet the shift in demand for beef exports.
UFJ report is here in Japanese:
http://www.ufji.co.jp/publication/report/press/041006.pdf
Saru
May 18, 2005
2:10 pm
_Japanese beef prices have sizzled higher due to a tighter domestic market, with parts such as tongue particularly expensive amid a lack of U.S. supplies, and industry sources say conditions should stay buoyant._
_The retail price of Japanese-produced beef rose to 703 yen ($6.54) per 100 grams on average last week -- its highest since the Agriculture Ministry started compiling such data in August 2003. It was 673 yen a year ago._
_"I don't think the domestic market is facing severe supply tightness. But it seems there has been a constant shortage since the American beef import ban, which is keeping prices high," said Fuminori Ogata, a commodity analyst at Himawari CX Inc._
_"Supplies from Australia have increased but they still haven't completely filled the shortage of U.S. beef," Ogata said._
Younghusband
June 3, 2005
7:46 pm
BeefWatcher
June 27, 2005
9:29 pm
ComingAnarchy.com » Blog Archive » More Beef!
September 14, 2005
5:21 pm
ComingAnarchy.com » Blog Archive » Bush in the Old Capital
November 15, 2005
2:13 pm
jeffery dixson
November 22, 2005
7:10 am
I love eating in Japan but they are wrong Let US beef in help all of us that love a good beef bowl it not a beef bowl with out US beef
Put the smile back on my face.
chardk1
January 21, 2006
4:03 am
Less the month in and already a screwup. This is why, right or wrong, the Japanese are suspicious of American beef. Living in Japan, my impression is the Japanese believe that Americans are extremely laissez-faire about things like maintaining order and quality control standards. Hard to deny, in some ways. So they are inclined to think the worst about the existence of an undiscovered BSE epidemic in the US and the US's ability to keep it out of Japan. It doesn't help when the plant spokeman repeatedly calls it "an honest mistake" and insists it's not a big deal. Uh, no one is accusing the company (or the US beef sellers in general) of fraud. It's their competence that is in question, and the "honesty" of the mistake isn't a defense to that. Instead, making "plain, honest mistakes" tend to confirm to the Japanese that American beef packers just don't really know what they're doing.
As an American I'm not concerned about the consumption of American beef (realistically, chances of contracting Cruetzfelt-Jakob from eating American beef, or any other current source, is so low that your chances of getting killed in an auto accident on the way to buy said beef is exponentially greater) but the fact remains that the Japanese are highly skeptical, and Americans are not going to carry the day by simply comparing beef to Toyotas (a highly dubious analogy), calling Japanese irrational, and putting political pressure on the Japanese government. The Bush Administration is highly unpopular here and viewed with massive distrust, which doesn't help. I can't argue with that. If a government will lie to its citizens about wire-tapping and lie to the world about intelligence to start a war, what are the chances it's being honest about a tiny, tiny possibility of making people sick in Japan?