Japan Disaster Creates Possible Windfall for U.S. Meat Exports

The triple-punch disaster in Japan -- the massive earthquake, tsunami and nuclear-reactor crisis -- is creating serious concerns about the nation's food supply.

Japan consumes most of the agriculture that it produces, with food products like seafood, dairy and vegetables reportedly accounting for only 0.5% of the country's total exports. Rising radiation levels from damaged nuclear power plants, meanwhile, have prompted Japanese authorities to stop shipments of milk and some vegetables produced in the region around the reactors.

Some fear that the disaster also could severely impact U.S. meat exports to Japan. Growth of those exports has been recovering from several years of restrictions in Asia after concerns about tainted U.S. beef. But industry officials remain optimistic.

Operations 'Severely Impacted'

"When we take a look at this whole Tohoku [Northeastern Japan] region, there's like four major prefectures have been affected," says Phillp Seng, President and CEO of the U.S. Meat Export Federation (USMEF), in a recent radio interview. "People have to realize it's only about 2% of the population, and about 2% of the GDP. But what they produce is about 16% of the pork, about 12% of the beef and about 15% of the poultry, and all those operations have been severely impacted."

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According to the Federation, less than half of Tohoku's 17 wholesale cattle markets have resumed normal operations, but the disruption should still only have a regional effect. Japan produces about 43% of the beef and 53% of the pork that it consumes.

For his part, Seng, who spent years living in and working in Japan, expects a shortage of domestic meat. That shortage, he says, will create "a need to bring in more meat products -- and so the outlook I think looks promising as far as [U.S.] exports and meeting our forecasts and possibly even exceeding our forecasts for Japan."

For now, USMEF Is retaining its earlier 2011 forecast figures for U.S. pork and beef exports to Japan. That forecast calls for 153,000 metric tons of beef, valued at $790 million, to be exported to Japan this year -- representing a 23% increase over last year. The group expects U.S. pork exports to Japan to increase 3% this year to 447,000 metric tons, valued at $1.7 billion.

Supply Chain Concerns

Of course, those U.S. meat exports need an vast infrastructure to get them to the Japanese market, and large swaths of Japan's roads, buildings and electric grid have been damaged by the disaster. But USMEF says much of its beef and pork are arriving at ports that weren't damaged by the quake, such as in Tokyo and south of the capital. And the Federation says that most the ports damaged by the quake are expected to reopen this week.

The nation's rolling blackouts are also affecting refrigeration in some areas, as well as ground transportation. Cold storage facilities in Japan are still being cleaned up, and electricity to those facilities is inconsistent.

"It is far too early to speculate about the long-term impact of this disaster on the nationwide economy of Japan," USMEF said in a recent statement to its members, "but even in recent economic times that were considered sluggish, Japan has remained a very robust market for U.S. beef and pork."