Japanese likely to drop ban on beef by December

Meat industry watchers anticipate the Japanese border should open to imports in December after being closed for almost two years, which is good news for the national cattle market and Colorado cattle producers.

Kyodo News out of Japan is reporting the country’s Food Safety Commission said the chances of American and Canadian cows being infected with mad cow disease are extremely low. The panel is expected to release a draft report later this month.

“Based on the outcome of Tuesday’s (Oct. 4) meeting, the panel is expected to give its scientific endorsement on the safety of U.S. and Canadian beef in the draft report,” according to the Kyodo news story. “The Food Safety Commission is due to submit a final report to the government after soliciting public opinion for about a month on the draft report … Japanese imports of U.S. and Canadian beef, if resumed, would be limited to beef from cows of up to 20 months old.”

In December 2003, a single dairy cow in Washington state was discovered to carry bovine spongiform encephalopathy, a degenerative disease of the central nervous system commonly known as mad cow disease. Japanese officials closed their trading borders to American-produced beef after the discovery.

To date, the disease hasn’t been detected in cattle under the age of 20 months, one reason why testing cows this young appears unnecessary. Most cattle are slaughtered before this age, deeming universal testing unnecessary. Still, Japan was previously insisting on testing of all cattle for mad cow, despite the age.

When the Washington mad cow case was discovered, most of the world sealed its borders to American beef and live cows. Since then Mexico, the Philippines, Indonesia and Europe have opened their borders. Japan is the largest export market for American beef and having closed the marketplace has been detrimental to American producers and meatpackers.

Keith Belk, animal sciences professor at Colorado State University, has been working diligently with Japanese officials to help reopen the border to U.S.-born cattle and beef. He hopes the border will be open by the end of the year, because of the timing of the release of the Food Safety Commission report and President Bush’s planned trip to Japan in November.

“If you listen to Congress and the media the Japanese government has been stalling, but I believe they have been positioning themselves politically for an announcement,” Belk said.

“Prime Minister Koizumi and the Minister of Agriculture want the border to open,” he said. “The Japanese consumers believe the U.S. product is safe and those that don’t probably never did and probably never will.”

Assuming the borders are opened soon, it may be years before the United States regains the market share it has lost in the country. In the absence of American beef, the Australian beef market has consumed as much of the market as possible.

“A reasonable estimate is close to four years,´ said Lynne Heinze, vice president of information services for the U.S. Meat Export Federation. “We used to export half of their beef, and Australia exported around 48 percent before the closure. Now there are 26 countries in the marketplace and Australia took as much of the market as it could.”

The Japanese are also only accepting beef that meets its beef export verification rules, including the 20-month age restriction and shipping boneless, whole-muscle cuts. Packers in Colorado that currently meet the restrictions include Cargill Meat Solutions Corp. in Fort Morgan, Coleman Natural Products Inc. in Denver, Colorado Meat Packers Inc. in Denver, Double J Meat Packers Inc. in Pierce and Swift & Co. in Greeley.

“In Colorado the closure has meant producers have lost between $15 and $66 per animal, depending on the season and other factors,´ said Terry Fankhauser, executive vice president of the Colorado Cattlemen’s Association.

He said that while the border has been closed for two years, higher domestic prices due to supply shortages caused by the drought helped keep the industry afloat.

“I don’t think the producers have absorbed the losses because the cost of production operates on such thin margins,” he said. “These markets have essentially been wiped out … when they reopen it will not be considered new money, it will simply be normalizing the market.”

Kim Lock is the agriculture reporter for the Northern Colorado Business Report. To suggest column ideas contact her at (970) 221-5400 ext. 222 or at klock@ncbr.com.