Ag News -
State Ag News
Tuesday, 29 January 2013 08:22
By TIM UNRUH
Human tongues were waggin' happy Monday after Japan's announcement that it was easing restrictions on U.S. beef, a move that could help domestic beef prices as producers struggle with high feed costs.
After producers in the U.S. have worked for nearly a decade to eliminate the risk of bovine spongiform encephalopathy -- the slang term is Mad Cow Disease -- Japan has agreed to allow, beginning Friday, imports of products from U.S. cattle 30 months of age or younger. Currently, the country allows imported products only from cattle 20 months and younger.
The move will result in hundreds of millions of dollars of increased exports to Japan, according to a Monday release from the Kansas Department of Agriculture.
"It's basically opening up trade access that we didn't have yesterday," said Glynn Tonsor, a professor of livestock marketing at Kansas State University.
"That's definitely good news for the U.S. cattle industry," he said.
Beef tongue in demand
Constraints will be eased, providing an avenue for all sorts of products, including beef tongue, which is in high demand in Japan.
"That's a product that a typical U.S. resident doesn't place a high value on," Tonsor said.
That "cultural difference" means more pounds of tongue from older critters may be heading overseas, he said.
The announcement showed that implementing "an effective system of interlocking safeguards that has led to the virtual elimination of BSE in the U.S." has paid dividends, according to a Monday news release from U.S. Sen. Pat Roberts.
One U.S. cow infected with BSE was detected in Japan in December 2003, prompting the country to close imports from the United States.
At the time, Japan was America's biggest export customer, spending $1.4 billion a year, according to the Roberts release.
After "the cow that stole Christmas," Tonsor said there were no sales to Japan for at least two years.
Then the country "slowly opened the door" to partial imports from the U.S. market.
Monday's development and Friday's down cattle-on-feed report from the National Agricultural Statistics Service prompted a $2 to $3 spike in cattle futures prices, said Vaughn Isaacson, a farmer and cattleman in southern Saline County.
"That's a pretty quick reaction," he said.
The 11.2 million inventory of cattle and calves on feed for slaughter for feedlots with a capacity of 1,000 or more head was 6 percent less on Jan. 1 than the same date in 2012.
The report showed there were fewer cattle than expected, Isaacson said.
"Everybody thinks it's going to improve demand, and that's what drives the system," he said.
Cattle ready for slaughter have been trading in the range of $1.25 a pound, said Mike Samples, manager of the Farmers & Ranchers Livestock Commission Co., and feeder cattle weighing 800 pounds were fetching $1.40 a pound last week.
But high feed prices are making profits difficult to obtain.
"The cost of gain is really high with high-priced grain," Samples said. "A little boost from the Japanese definitely helps."
The announcement was mostly about politics, Isaacson said. Thirty months versus 20 months "has very little to do with the safety of the beef," he said.
Calves weigh 80 to 100 pounds at birth and are sold for slaughter at roughly 1,200 to 1,300 pounds in 18 months.
The cattle-on-feed report confirms there is a tight supply, Tonsor said, and the news from Japan will boost demand.
News of a beef processing plant closing in Plainview, Texas is more proof "that there is not enough cattle," Isaacson said. "I think the Japanese have realized that if they don't change their politics, (beef's) not going to be available."
-- Reporter Tim Unruh can be reached at 822-1419 or by email at