The safety of U.S. beef may help move it to center plate in Japan as that country comes to grips with its first case of bovine spongiform encephalopathy (BSE).
A dairy cow on a farm near Tokyo tested positive for the disease in early September. Now, a poll by the Japanese newspaper Asahi Shimbun indicates 89% of Japanese consumers are very or somewhat concerned about beef safety.
Those widespread concerns in the U.S.'s top beef export market are affecting revenue and prompting restaurants and supermarkets there to feature imported beef.
The U.S. Meat Export Federation (USMEF) reports that overall Japanese foodservice sales through mid-October were off 25 to 50%. Yet, the fast-food, beef-bowl chain Yoshinoya credits sales increases to featuring U.S. beef and significantly cutting prices.
In contrast, September sales at Yakiniku broiled beef restaurants dipped more than 12% year-on-year, and sales at McDonald's Japanese operations were projected to drop 10% in October, according to Reuters.
The safety concerns also are impacting retail sales in Japan. According to USMEF, domestic beef sales were off 70-90% through mid-October. And, the situation was only slightly better for Japan's imported beef sales, which were off 50-80%.
In addition to consumer concerns about beef safety, the strong U.S. dollar, high U.S. beef prices and tough competition make the Japanese export market very challenging, says Joel Haggard, USMEF's vice president of the Asia Pacific Region. U.S. beef exports to Japan are down 11% this year, and for the first time in six years, the U.S. is losing market share there.
“Because of the weak economy, we're seeing some service buyers shy away from some of our high prices,” Haggard says.
Furthermore, the Japanese have a long-held perception that domestic meat is safer than imported meat, says Phil Seng, USMEF's president and CEO.
“They have an acute awareness of food safety, where the product is produced, how it is produced and how it is handled and processed,” he explains.
USMEF has been working for 20 years to illustrate the safety and quality of U.S. beef, Seng says. The organization also has been developing a trust between the U.S. beef industry and Japanese consumers and trade.
“This is really the thrust of our programs in Japan,” he says.
That thrust got a boost this fall when USMEF shifted more than $1.7 million from other projects to intensify its safety campaign.
Launched in July, USMEF's Food Safety Bureau in Japan is the primary vehicle to monitor media, correct misinformation and conduct its proactive safety information campaign. The bureau is working closely with traders and consumers.
“It's an issue of imported foods versus domestic foods,” Seng says. “We're looking to actually build a coalition with other suppliers in Japan to address these food safety concerns and these concerns about imported products in the Japanese market.”
To reinforce the success of the partnership between industry, government and science in ensuring that U.S. meat products are safe and wholesome, the bureau conducted a food safety seminar in Tokyo in September. It also hosted a media conference in October with more than 60 members of Japan's consumer media.
In addition, the organization developed and placed consumer ads for a circulation of more than 26.7 million. The ads reiterate key safety messages and reassure Japanese consumers that U.S. beef is safe, tasty and nutritious. USMEF also sent letters to more than 200 retailers and 100 foodservice locations.
At headquarters in Denver, USMEF is conducting packer briefings and providing case-by-case support to facilitate trade.
“We simply cannot afford to stand by and do nothing,” Seng says. “While we've shifted our resources to deal with the current crisis, we haven't forgotten that we will need to get back to normal demand-building efforts as soon as possible. And that may mean we will need to find additional funding down the road.”
The amount of funding for market development in Japan is directly related to the amount of return in that market long-term, he explains.
“I think it's not something that translates into direct sales immediately,” he says. “But over a sustained period of time, it does make a difference. As you have more people converted and using our product, they will stay with the product.”
He says that's already evident with buyers of U.S. beef in Japan who are going to cheaper outside cuts in light of higher prices.
The largest source of funding for USMEF operations in Japan is USDA through its Market Access Program (MAP) and Foreign Market Development programs. USMEF members and affiliates have been aggressive in supporting the USDA proposal to double MAP funding in the new farm bill.
A decline in beef checkoff funding for Japan operations also has impacted U.S. beef exports to that country. It has dropped from $3.7 million in 1996 to about $2.4 million this year, Seng says.
“We really need a lot of information and a lot of support from rural America and from all Americans… to keep these programs and this funding where it is because this is critical to our initiatives internationally on behalf of the industry,” he says.