What is in this article?:
- Japan deal could open floodgates for US beef industry
- Why did recovery take so long?
- The U.S.-Japan beef export deal could supercharge beef exports to Japan this year.
- Japan’s acceptance of U.S. beef will lead to an immediate sales spike in Japan, and it could encourage other neighboring countries to admit more of what we export.
A decade ago, the U.S. beef industry was going global like never before. Production was rising, demand was growing, and everyone just wanted to buy more cattle. The excitement was contagious.
Then the growth markets crashed to a halt.
The first U.S. case of mad cow disease was diagnosed in Washington State and the global marketplace for US beef immediately changed. We still haven’t recovered from it–though now, at long last, it looks like we’ll have a chance to get those markets back.
Outgoing U.S. Trade Representative Ron Kirk and Secretary of Agriculture Tom Vilsack have announced a deal that could supercharge beef exports to Japan this year. Under the agreement, beginning Feb. 1, 2013 Japan will accept U.S. beef from cattle less than 30 months old, up from the previous limit of 20 months. The only exception involves ground beef, which will continue under the old restrictions.
Our trade diplomats deserve thanks for their efforts. Japan’s decision is long overdue, but it wouldn’t have been possible at all without a big push from Washington.
The beef industry, for its part, has learned important lessons about responding to a crisis–lessons that may help it later on, as new challenges emerge.
In 2003, Japan was the world’s biggest buyer of U.S. beef, importing nearly a billion pounds of it annually. This was no surprise: American beef is the gold standard. Nobody raises it as well as we do.
In December of that year, however, a case of bovine spongiform encephalopathy, better known as BSE or mad-cow disease, struck our herds. It’s a rare and poorly understood affliction, but science tells us that people who ate BSE-tainted meat can die from a brain disorder.
For three years, Japan banned all U.S. beef imports. When sales started again, they took place under such severe restrictions that volume remained low. Meanwhile, ranchers in other countries, especially Australia, took over what had been our dominant position in the Japanese market.
Sales have improved recently, to nearly 800 million pounds of U.S. beef in the last two years combined. The new rules could spur sales of more than 500 million pounds in 2013 alone, worth $1.5 billion.
That’s an additional $1.5 billion pumped into the American economy, like a miniature stimulus program–except that it won’t cost taxpayers a penny.