Colorado ranchers say they expect to see a rise in beef exports in the wake of Japan’s earthquake and subsequent tsunami.
Japanese contamination fears slashed U.S. and Colorado beef exports in 2003 as mad cow disease gripped TV news audiences, causing Japan and other countries to close their markets to U.S. beef. Now it may be contamination fears that help Colorado gain some of that ground back, according to the Colorado Department of Agriculture.
“Our hearts go out to those in Japan,” Tim Larson, an international trade expert with the Colorado Department of Agriculture told the Colorado Independent, “… but Colorado will see opportunities and we will continue to work with our friends in Japan.”
For Colorado, those exports are about real Colorado jobs. More than 100,000 jobs are supported by the Colorado agricultural industry, including everything from processing to transportation of agricultural products, according to the Department of Agriculture. And in dollars, that means over $7 billion in Colorado farm and cash receipts in 2009, with just over $4 billion of that figure in livestock and products.
Larson said that last year Colorado was among the top states in beef exports to Japan. The industry was second in exports of fresh/chilled beef with 11 percent of the market, first in frozen beef (26 percent of the market), and second in edible offal with 14 percent of the market. He said other areas also saw a significant bump in 2009-2010, pointing to a 29 percent increase in frozen products.
Colorado was ranked second in beef exports to Japan in 2008.
With Japan’s imports of U.S. meat growing 122 percent to $76 million in 2008, Larson said he thinks there is another $100 million still to be tapped to reach 2003 export levels.
Larson mentioned that the first month of 2011 saw further jumps in Japanese purchases of Colorado beef.
Those jumps were to be expected as the U.S. continues to come back from the Japanese decision to close a U.S. beef trade that once saw the country importing $1.4 billion of U.S. beef. While Japan now operates a partial ban, allowing animals slaughtered at 20 months and under into the country, its exclusions continue to cost the state considerable money.
With the majority of cattle slaughtered in Colorado between the ages of 20 and 30 months old, the state finds itself unable to sell many of its meat products to Japan.
Larson said the problem is compounded by the fact that many beef products, including tongue and short plate beef, see their values decreased dramatically when pulled from the Japanese market. For example, cow tongue, when open to the Japanese market, can reach $9 a pound, however, without that market the price of tongue drops to .22 cents a pound in the U.S.
He said decreases in value to both tongue and short plate amount to a loss of $46 million a year to the Colorado economy.
Senator Michael Bennet recently signed on to a Senate resolution urging Japan to fully open the beef market to U.S. trade.
“U.S. beef has long been proven to be safe by internationally recognized, science-based standards,” Bennet said in a release. “Japan’s unwarranted objections and non-tariff trade barriers unfairly limit access to a critical market that is important to Colorado cattle producers, Colorado’s beef industry and Colorado’s economy.”
The State agriculture department said it will be up to Japan on whether they want to open the market further to allow Colorado, and the rest of the U.S., to help them supply their country.
The Colorado Cattlemen’s Association said they’ve got the beef for the long-term growth already in their herds and said it would be up to the producers to start helping to secure orders.
Terry Frakhauser, executive vice president of the Colorado Cattlemen’s Association, said that long term they expected to acquire more of the Japanese market “though exactly what type of growth is hard to speculate on.”
Frakhauser explained that Colorado has already already increased its beef exports to the country after Australia experienced weather conditions that reduced much of that country’s exports. He said Colorado had been able to back-fill much of the beef market otherwise captured by Australia.
Still, despite high hopes, Frakhauser said the near future will likely see decreases in the need for the product.
He said the widespread problems the country is facing will limit its need for high-cost protein sources. However, when the country is ready for the product, a number of challenges to the local Japanese industry will likely drive demand for Colorado beef.
He said when the time comes, Colorado cattle ranchers are “ready to move on it.”
Colorado currently has an inventory of 2.6 million cattle and calves.