Oct. 18 (Bloomberg) -- Japan is preparing to ease restrictions on U.S. beef imports as concerns about mad cow disease receded and domestic cattle production fell after the nation’s worst nuclear disaster since World War II.
Japan, the biggest buyer of American beef before an outbreak in 2003, restricts U.S. beef imports to cattle aged 20 months or younger on concern that older animals may be at higher risk for the brain-wasting disease, also known as bovine spongiform encephalopathy. The government is considering raising the age limit to 30 months, said two ministry officials who declined to be named because of department policy.
The new rule may boost purchases from companies including Tyson Foods Inc. and Cargill Inc., and contribute to President Barack Obama’s target to double exports in five years and create more jobs. The restriction, relaxed in 2005 to allow meat from young cattle, caused about $1 billion in lost sales a year, according to the National Cattlemen’s Beef Association.
“We have exchanged opinions on the issue through expert-level talks between the two governments, and we hope it will be resolved accordingly,” Agriculture Minister Michihiko Kano told reporters in Tokyo today, declining to provide a timeframe for a decision.
Cattle futures rose to a record for the second-straight session yesterday on signs that U.S. supplies are shrinking as export demand climbs. Futures for December delivery reached $1.24475 a pound, the highest for a most-active contract since the Chicago Mercantile Exchange began trading live cattle in 1964. Prices were little changed at $1.23775 a pound at 6:01 p.m. in Tokyo.
Spokesman Takahiro Hiramoto from the health ministry said the department hadn’t made a decision yet about raising the age limit to 30 months. Tatsuya Kajishima, senior press counselor for the agriculture ministry, said no schedule has been set.
Japan’s Food Safety Commission must confirm that any change in policy won’t increase human health risks before the country can import beef from older U.S. cattle. Japan also requires U.S. meat shippers to remove risk materials such as spinal cords, which can transmit the disease to humans if consumed.
A decade-long study by the Japanese government showed that most cases of BSE were found in cattle older than 30 months.
If Japan relaxes the age limit, U.S. shipments will likely return to pre-ban levels, said Susumu Harada, senior director at the Tokyo office of the U.S. Meat Export Federation.
“The change would help normalize beef trade as U.S. products for overseas shipments are mostly from cattle aged up to 24 months,” Harada said in a telephone interview today.
Gyudon Beef Bowl
Japan banned U.S. beef in December 2003, prompting restaurant chain operator Yoshinoya Holdings Co. to suspend sales of its “gyudon” beef bowl. The U.S. was the largest beef exporter to Japan after Australia in 2003, supplying 267,583 metric tons worth 128.5 billion yen ($1.7 billion), data from the agriculture ministry showed.
In the eight months ended Aug. 31, Japan imported 76,892 tons of U.S. beef, surging 48 percent from a year earlier, as the yen’s rally to a postwar record against the dollar made American produce more affordable to Japanese consumers. Concern about the safety of domestic beef also boosted imports as fallout from a crippled Fukushima nuclear station tainted Japanese cattle feed and meat, Harada said.
Japan banned shipments from Fukushima and three other prefectures for about a month after farmers fed cattle tainted rice hay, producing beef containing radioactive cesium exceeding the government’s official limit. Contaminated beef was sold at supermarkets, deepening consumer safety concerns and slashing sales and prices of domestic beef.
In 2007, Japan proposed a plan to ease the restriction on U.S. beef imports to allow meat from cattle aged up to 30 months under the former government of the Liberal Democratic Party. The administration of President George W. Bush had urged Japan to eliminate the age limitation completely, in line with international standards, and the deadlock continued.
Japan and the U.S. held their first working-level meeting in three years in September 2010, based on an agreement reached in April last year between Agriculture Secretary Tom Vilsack and then Agriculture Minister Hirotaka Akamatsu to resume beef talks.
The World Organization for Animal Health, also known as OIE, voted in May 2007 to give the U.S. its “controlled-risk” rating for mad cow disease. The designation means controls are effective, and meat from U.S. cattle of any age can be safely traded. The OIE standards are used to settle trade disputes at the World Trade Organization.
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