041040 Pact Seen as Good for Beef Trade

Amarillo, TX - An agreement to reopen beef trade between Japan and the United States is a giant step toward recapturing the $1.4 billion annual export trade market.

But it is more than just that, said Burt Rutherford, Texas Cattle Feeders Association communications director.

Japan was the biggest export market for U.S. beef, with South Korea, Mexico and Canada also important, Rutherford said.

"We haven't sent a thing to South Korea or Japan for the past year," he said. "Many other Asian countries have been looking toward Japan for direction and leadership. Now that we have an agreement worked out with Japan, I think we have a very good chance of working out agreements with the other countries.

"The bottom line to cattle producers in this part of the country is this is a huge first step in ultimately regaining not just the Japanese export market, but exports worldwide for our beef," Rutherford said.

Major packing companies still are analyzing the proposed agreement to determine how it will affect their business.

Gary Mickelson, Tyson Fresh Meats spokesman, said Japan was the company's leading export customer before December, accounting for 27% of its international beef sales in 2003.

One of the concerns is the inclusion of age verification.

Under the Beef Export Verification program for Japan, cattle must be traceable to live-animal production records, which indicate they are 20 months old or younger at the time of slaughter.

Mickelson said Tyson purchases younger beef animals, "but it comes back to documentation." Rutherford said most plants process fed cattle, of which 85% fall under the 20-months-of-age time frame.

"Certainly, though, not all the cattle in the United States come to the feedyard with a birth certificate," he said.

The U.S. Department of Agriculture negotiated to include a process to determine age by carcass characteristics. The two nations will spend the next 45 days determining what physical characteristics will be used in that process, Rutherford said.

In July, he said, the United States and Japan will sit down again to reconsider the 20-month limit. "We are hopeful we ultimately will be able to trade with Japan under the same framework we trade with other countries and that is at the 30-month break-off." There is no consensus within the industry when trade between the two countries actually will resume.

"NCBA (National Cattlemen's Beef Association) thinks there's a possibility we'll have some trade by the end of the year, depending on how quickly the U.S. and Japan can work their way through the rule-making process," Rutherford said.

"The important thing we all have to remember is we still have a lot of work to do in Japan to regain market share. It's been 10 months since we've exported any beef to Japan, so we're not going to return to our pre-Dec. 23 levels when we start exporting product," he said.

"It's going to take a little while, once we begin sending product over there."

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