The Dec. 12 announcement partially reopening the Japanese market to U.S. beef buoyed spirits considerably among American beef interests, and even some Japanese. It also brought to full crescendo a buzz that began in spring 2005 and was stoked last fall regarding the requirements and the potential of servicing a Japan market closed to all U.S. beef imports just 12 days shy of a full two years.
The agreement allows the importation of beef and selected products from animals of U.S. or Canadian origin, verified as 20 months of age and younger. Under the agreement, age must be certified, either by documentation or A40 classification. The A40 procedure is conducted by USDA graders classifying ossification of the chine bone and other factors.
How many head?
Estimates on what percentage of the U.S. fed-cattle supply will qualify under these rules have ranged from single digits to USDA Secretary Mike Johanns' figure of 30-35%, which is generally regarded as overly generous. Regardless, the shortfall is likely to be manageable initially, as most experts believe it could be two to three years before Japan regains its 2003 status as the No. 1 export destination for U.S. beef.
But the news set the industry to buzzing. As in any scenario where supply stands to be short of demand, it usually translates into the short commodity being worth more in the market. Just how much, however, is hard to say where U.S. beef is concerned.
As reported on pages 56-66 of this issue, some in the industry are anticipating a $25/head premium for Japan-eligible cattle. While news of such premiums has been mostly anecdotal, recent bids at Joplin Regional Stockyards (JRS), the first Quality System Assessment (QSA)-certified livestock sales facility in the U.S., would seem to bear out the contention.
News from Missouri
Mark Harmon, head of marketing and public relations for JRS, reports the Carthage, MO, market moved 8,400 head of six- to seven-weight calves in its late December value-added sale. Of those, 6,000 were QSA-certified, which brought a $4-5/cwt. premium over the other 2,400 value-added preconditioned calves.
Such prospects have many folks this side of the Pacific thinking about, if not scrambling, to ensure they have the requisite documentation on the calves they'll be selling, or ensuring it exists on the calves they'll be buying. These folks, of course, recognize it's traditionally the early adopters who tend to garner the most reward from a new opportunity.
But just like any program at its startup, a little study by individuals on what's required in such a certification goes a long way in illuminating details and eliminating misinformation.
A good place to start is Iowa State University's Iowa Beef Center (IBC) Web site — www.iowabeefcenter.org. It offers some great information on QSAs and their workings, as well as how to get your house in shape to participate.
On the opening page, under “News and Announcements,” click on “Questions about Trade Issues? Visit our Resource.” Once on the following page, click on “Visit the Age & Source Verification Page.”
Click on “Frequently Asked Questions About Age Verification To Japan.”
If you have access to high-speed Internet, watch the dandy, two-hour IBC Web cast featuring Samantha Simon, program manager for USDA's Audit, Review and Compliance Branch. Go to www.iowabeefcenter.org. Under “News and Announcements” on the opening page, click on “Webcast follow-up: Answers to your questions.”