Bloomberg | 10.10.2012

Japan easing restrictions on US beef, paving way for Tyson

By Aya Takada and Yasumasa Song

Japan, Asia’s largest beef importer, will consider taking additional steps after easing restrictions on U.S. shipments, widening opportunities for exporters such as Tyson Foods Inc. (TSN) while ensuring supply to local retailers.

Japan’s health ministry will relax the age limit on U.S. beef to 30 months from 20 months next year after it receives approval from the nation’s Food Safety Commission as early as this month, according to Hideshi Michino, director at the ministry’s food-safety department. The threshold, imposed to safeguard against mad-cow disease, may be eased further to six years, he said in an interview without giving a timeframe.

The relaxation may increase purchases by Japan, which bought 10 percent more beef from the U.S. in the first half of 2012 because of a strong yen and concerns about the safety of domestic food after the nuclear disaster in Fukushima prefecture last year. Cattle futures in Chicago climbed to a record on Sept. 13, while surging corn and soybean prices boosted feed costs. Tyson gets 41 percent of its revenue from beef, according to data (TSN) compiled by Bloomberg News.

“We believe the safety of beef is ensured by eliminating risk materials from the meat, rather than limiting the age of cattle,” said Minoru Yamamoto, director at the international animal health affairs office of the agriculture ministry.

The commission will approve the 30-month limit probably by the end of this month, said Makoto Osone, an official with the food-safety group, without commenting on the six-year limit.

‘Normalize’ Trade

Japan imposed a ban on American beef following the first U.S. discovery of mad-cow disease in 2003, blocking sales of the meat to the biggest export market. The country resumed purchases from the U.S. in 2005 on condition that the meat must come from cattle at the age of 20 months or younger, which the U.S. said was unnecessarily stringent. Japan also requires exporters to remove materials that could transmit the disease before shipment.

While the U.S. government said Japan should comply with the international safety standard for the beef trade, U.S. exporters see the 30-month limit as helpful for them to restore sales to pre-ban levels, said Susumu Harada, senior director at the Tokyo office of the U.S. Meat Export Federation.

“The new rule will help normalize beef trade as U.S. products for overseas markets mostly come from cattle age 24 months or younger,” he said.

The U.S. was the largest beef exporter to Japan after Australia in 2003, supplying 267,583 metric tons worth 128.5 billion yen ($1.6 billion), data from the agriculture ministry showed. Tyson, JBS SA, Cargill Inc. and National Beef Inc. are the biggest U.S. beef suppliers to Japan, according to Takemichi Yamashoji, senior marketing director at the Tokyo office of U.S. Meat Export Federation.

Japan imported 240,815 tons of beef in the first half of 2012, with 24 percent coming from the U.S., according to the ministry. Australia was the largest supplier with 153,938 tons,