Day 1.

Australian Embassy

 

Speakers were Samantha Jamison (MLA), Bill Withers (Minister – Counsellor Agriculture), Catherine Taylor (Trade Commissioner Austrade).

 

Samantha Jamison spoke on current market conditions although some of information may have been a bit dated as she is on maternity leave. Points of interest were:

 

• Current beef consumption per head per year info supplied by Japanese Ministry for Agriculture Fishing and Forestry (MAFF)

 

2006	2015	Type
5.5 kg	7.7 kg	Beef
10.6 kg	9.1 kg	Chicken
11.5 kg	8.8 kg	Pork

A question was asked about the breakdown of beef consumption, i.e; how much A5 B3 etc, however that information had to be extracted from the MAFF report. Another question was asked about the jump in consumption for beef and the decline in other types. The answer was MAFF may have been predicting this on data they had analysed.

 

• Total numbers were estimated at 4.4 Million head in Japan of which 3 million were beef orientated breeds.
• Of beef consumed in Japan it was about 47% Aussie and 50% Japanese. The other 3% included countries like Canada New Zealand etc.
• Questions were asked about Japanese trace back systems and Australian systems. Japanese have a very comprehensive system were the consumer can actually go online and type a number that is labelled on the packaging, which will give details of the animal and its owners and full treatment history. These more detailed systems seemed to be supplied by Prefectures trying to market their brand of beef. However MAFF have there own less comprehensive but still of good quality via the web. (These web systems can also be accessed by mobile phone has well.) The system was evident when we went to look at meat being sold in retail outlets that same day, in the form of terminals located at the site of sale. Problem was they were not working at the time. Rob Mann (MLA) informed us this is usually the case as the trace back system is only a marketing tool. A question asked to Samantha Jamison in regard to Australian traced back systems. How are ours link to consumers in Japan. Basically there not! There is a voluntary system called JAS which some companies are using or the MLA version, which is a sticker like are bar code but more complicated looking. The consumer takes a photo of this code with a mobile phone camera and can access a MLA information site that gives information on Quality Assurance programs in Australia etc. It does not go in to detailed information on that particular piece of meat.
• A question was asked, how much the MLA budget compared with the USA one; the answer was unclear as to the amount but assumed there was no evidence of USA spending large amounts on media and promotional programs etc.

Bill Withers spoke about issues related to the meat industry trade in Japan.

• He labelled the USA pressing to increase the 20 month age restriction to a 30 month age restriction for US imported meat as a “Profit Warning” for Australian imported beef. On this point the MLA is not as concerned as Austrade, they feel Japan is a long way away from the negotiating table. Austrade believe that April – June 2008 will be the time to tell if USA is successful in lifting the age barrier.
• If all imports into Japan increase more than 17% in one quarter compared to the same quarter the year before then all tariffs will increase from 38.5% to 50%. This has happened in the past, however Austrade believe they are keep a close eye and that it does not look like happening at the moment

• The final point Bill spoke about was the Wagyu Labelling issue. In Japan Australian Wagyu is labelled as Australian Marbled beef or along those lines. Cattle imported in Japan from Australia are labelled Domestic other. That can attract this tag once they have spent more of their life in Japan. Austrade has informed us that the “Ball is in our court”, i.e., Austrade would like the AWA to prove the parentage linkages between Wagyu cattle bred in Australia to those bred in Japan. There some people have issues with this for two reasons. 1 – Conflict with Free trade agreement talks with Japan (from what I could gather these talks can go on forever say 18 months!) 2 – Some companies with a branded beef product already in Japan feel that it is unnecessary and that it would just upset the apple cart.

 

Catherine Taylor spoke about Austrade and its role in Japan. Basically outlining what they can offer us as producers trying to establish markets in Japan.

 

The rest of the first day was spent looking at retail outlets in Tokyo, some high end retail department stores and other whole sale supermarkets. The highest price we saw was $500/kg for A5 graded product.

 

 

Day 2

 

This day was spent in the fish markets where we spotted Whale Bacon being sold at quite reasonable prices. Tuna was sold frozen on dirty concrete floors. Prices seemed to reach around $2000/fish. I think this was B grade fish, hence it been frozen.

 

                                                              

 

After breakfast we travelled to Tokyo meat markets where we saw the carcasses getting sold on the floor. A5 graded bodies were selling for $26/kg weighing around 464 kgs. ($12,064 per head). We also saw cattle arriving in trucks tied up like horses. All cattle killed here are led in! This stops the cattle getting stressed and cutting dark. We were given a brief run down on how there grading system works i.e. Meat colour, Fat Colour, Meat Texture/firmness, Marbling and Yield.

 

Meat buyers assessing and bidding on Carcases

Below is a table of the relationship between beef marbling evaluation and classification of old and new grade.

B.M.S No.	1	2	3	4	5	6	7	8	9	10	11	12
Evaluation Standard (old)	0	0+	1-	1	1+	2-	2	2+	3-	3	4	5
Classified Grade	1	2	3		4		4	5

 

When determining the overall meat quality scores those asses all 5 traits and mark it to the lowest score.

After this we travelled to Yonago for the Wagyu Show.

 

Day 3 & 4

 

Tottori National Wagyu Show

 

The group was a bit hesitant to attend this show, with all the negative sentiment towards Australian Wagyu breeders leading up to it. We were told to behave and respect the Japanese farmers and keep a low profile. This was hard to do being such a big group; however the impression we gave was more as tourists. The Japanese, were very happy to share their information with any foreigners, they were extremely polite and offered to have photos taken with them. On one occasion an Agri expert (that spoke English) from the Gifu prefecture, over heard us discussing pedigrees and approached us to help explain the pedigree. This gentleman then went on to explain several more pedigrees in the Bull shed. He pointed out bulls that were sired by 21^st Century which won the show 5 years earlier! This was very interesting as 21^st Century was a bull known for growth and frame not marbling. This Agri expert did eventually work out that we were Wagyu breeders; however his reaction was more of curiosity rather than criticism or ridicule. From this one meeting and talking to the Livestock Improvement Association of Japan (LIAJ), we formed the opinion that the Japanese are trending towards a bigger framed animal with a higher growth rate. Reasons for this are more market driven than a trend. Firstly, consumers are moving away from A5 type products and requesting more A4 – B3 type carcasses. This could be due to health awareness in regards to fat or a move away from traditional type cooking, whatever the reason the market is demanding a slightly lower marbled product. Secondly, feedlots are saying their costs have increased between 30% - 60% due to exchange rates and grain costs. If feedlots can feed an animal for less time and still obtain high carcass traits, then this would margins to be maintained.

 

A poster displaying prefectural sires available for AI.

We asked LIAJ if they could identify the top three bulls in Japan that they are aware of. Keeping in mind that they represent over 30% of Wagyu semen sales in Japan, this makes them the biggest trader of semen. There is a comprehensive breakdown of huge amounts of data on these bulls, which we are in the process of translating, some of it is provided below.

 

Bull	No Progeny born	No Progeny born 06
Yasushigekatsu P445	24,458	22,371
Shigekatsusakag P493
Fukusakae P214	162,016	23,992

 

 

Breeding lines that kept on coming up in pedigrees at the Japan show were, Yasufuku, Monjiro, Hirashige, and Shigekatsu.

 

Other aspects of the show were based around food and machinery. There was a history of

Wagyu tent, Prefecture tents where they were handing out information from pedigrees to tourist maps! Behind each prefecture tent were the females; each prefecture had about 10 – 15 females. The bulls were all in one shed that had about 20-30 bulls in it only. It is hard to imagine that those cattle were the best in the country.

Son of 21^st Century (Winner 2002)

The judging itself seemed to be in age groups and in sizes of about 30 – 40 head. I think there were 7 groups all up. The cattle are judged on the 2^nd and 3^rd days and results announced on the 4^th day. Which we were not there for. I have since herd that Shimane prefecture won and Miazkai and Kogoshima prefectures from Kyushu were runners up.

 

Day 5

 

This day we travelled to Kyoto via a feedlot in the Shimanie Prefecture owned by Machia san. This was a thousand head feedlot that had full bloods and Friesian F1 heifers on feed. He buys all his feeder cattle from Oki Island off the west coast of Japan 3 times a year. These cattle landed at his feedlot cost between $3500 & $4500 aud/hd. He buys his F1 heifers from Hokydo landed at his feedlot for $2000 - $2500 aud/hd. He has some breeding cattle maybe 100 that he joins to bulls bought from an AI centre. These were bulls that were not good enough for the centre, not sure why, however they go back to Shige Shige Nami bloodlines. His focus was not so much on genetics but on numbers. He has clients that like to buy his cattle on a per head basis so his objective is to just turn out the numbers.

At the bottom of the feedlot the local council had built a manure processing plant. Manure from the feedlot and the local shire is turned into fertiliser and sold to farmers etc. People employed in the plant are all over 70 years of age. Sort of like work for the dole.

 

Day 6

 

Kyoto

 

Today was spent site seeing then flown to Fukuoka.

 

Day 7

 

Moji quarantine facility in Kyushu.

This is a very impressive operation. Very clean tidy and over the top. The facility holds 1500 at once. Enough to unload one ship. It takes 15 days for quarantine with a day either side for loading and unloading. The remaining time is spent cleaning and preparing the facility for the next load. A question was asked why they can’t unload more ships in the cleaning time, they replied saying they needed the time to prepare the sheds. This aside, another shed to house another 300 head per month plus horses is in construction and should be online by the end of March 2008. The Moji facility handles about 80% of cattle imported from Australia, the other 20% are spread over Yokohama, Kobe and Osaka.

·         The total budget for quarantine services in Japan is $400,000,000 aud.

·          Tariff on feeder cattle currently below 300kg - $382.50 aud

·         Tariff on feeder cattle above 300kg - $637.50 aud.

Another question was asked about further quarantine space becoming available, the reply was, that if market pressure was enough then more space would become available.

 

One of 6 quarantine sheds that house 300 hd each

 

We did some basic figures on what an Australian F1 Friesian steer landed in Japan would cost.

 

$750 – Production costs to Aussie producer

$400 – Aus Quarantine + Shipping cost

$382 – Tariff

$2032.00

Based on these assumptions there is more economic sense to buy from Australia.

 

Suzuki Feedlot Kyushu

 

Suzuki san is now feeding Hammond Farms and Agreserves cattle which include F1’s through to full bloods. I think about 15% are full bloods the remainder F1 and F2’s. Total numbers are about 4000. Suzuki did have a farm in Hokydo which has been sold to increase the size of the farm in Kyushu by about 4 ha! Feeding costs have increased in Japan by 30 – 60% due to exchange rates and the cost of feed. This rate varies between feed lots. To counter this Suzuki san is feeding for less time and trying to get his suppliers to produce cattle that will grow faster. This goes hand in hand with the market trending towards lesser marbled meat.

Suzuki has his own branded product that he sells direct to retailers such as restaurants butchers and supermarkets. It is sold as Suzuki’s brand however information is given on packaging the cattle are imported. It is required by law to notify consumers of this. Most beef/cattle that is imported into Japan has to show its origin, i.e. it can be sold as domestic other, however in the government trace back system they are identified as being imported.

A large majority of Suzuki’s meat is sold on Honshu (Main Island). In typical style Suzuki san treated us to some magnificent full blood steaks and succulent rissoles, which were very surprising! He like most of the Japanese are very good at remembering names, I think the last time Suzuki san met my wife Pip was 3 or 4 years ago for a brief moment and he remembered her name!

 

From Suzuki’s feed lot we then travelled back to Fukuoka to then fly out to Hokydo the next day.

 

Day 8

 

Was spent travelling to Hakkido

 

Day 9

 

 

Today was spent with Shogo Takeda. Like always a true salesmen, he showed us all his best bulls and females, of which there are 80. He is currently joining his natural breeding herd to a bull called Noboru 62. This is a full brother to TF 147 ITOSHIGEFUJI; Takeda also has an AI herd of 5 cows of which some of them are 21 years old! Takeda keeps about 7 heifers a year for replacements and has joined them to a Shige Shige Nami son. To buy Shige Shige Nami semen in Japan, Takeda had to pay $3000/straw. Takeda was very accommodating all day. He took us to his feed lot then to his breeding farm then to his restaurant where he paid for the whole group’s lunch.

 

24 year old Full Blood cow on Takeda’s farm!

After lunch Takeda took us to Etsuku Eiracu’s feed lot which is the biggest in Hakkido. The feed lot is owned by a woman who works there as well. They feed Friesian F1 and full bloods. Her family also owns 100 freight trucks and a seafood wholesaling business. The feed lot is on two locations each being 1000 head. She buys cattle locally because of the large amounts of dairies and Wagyu breeders in the area. Takeda then took us to another friend of his that had a breeding herd of about 130 head and feeds about 300 head. Progeny from the herd were sold after being fed for 24 – 30 months depending on genetics. This breeder Masakatsu Uemura also flushes his top cows averaging 4 embryo’s per flush and about 50% conception using Friesian recipient cows. They wean there calves at 10 days then fed milk for 8 weeks. During the latter stage of milk feeding they introduce grain/pellets with very little hay. Most of the calves look a bit crook and could use more fibre in their diet.

 

This was the last farm visit we had in Japan. The next day was spent getting to Sapporo then flying back to Sydney.

 

In summary, the trip was very informative in relation to market conditions, breeding, and industry issues. I found it encouraging that MAFF was spending large amounts of money on Quarantine facilities in Moji to specifically cater for Australian cattle coming in Kyushu (keeping in mind 80% of cattle from Australia come in Moji port). If Australia can keep bringing in cattle for less than what feeder cattle can be bought domestically, then there will always be a market for live cattle. Even if America gets in with a 30 month aged product this will have little effect on the live trade as its meat is sold as “domestic other”. The American product will have a bigger effect on Aussie beef that is imported, to the extent that the USA could take 30 – 40% of the market share.

 

 

Wagyu Tour to Japan 810/07 – 20/10/07