Japanese bonanza boosts NZ beef

By LIAM DANN and BLOOMBERG

New Zealand beef sales to Japan have soared in the past year as exporters grabbed a gap in the market caused by a ban on US beef.

New figures from Meat and Wool New Zealand show total beef exports to Japan in the 12 months to September 30 were up 96 per cent by volume and 124 per cent by value. The market is now worth $247 million.

Last weekend, the US beef industry made progress towards ending the ban on exports to Japan.

Beef from the US - which had accounted for half the beef consumed in Japan - was banned by Japan and Korea after the discovery of one case of mad cow disease, or BSE, in Washington state last December.

Japanese and US officials have now set up a framework for the resumption of the beef trade but they gave no timetable and several regulatory issues still have to be worked through.

"We're certainly not concerned that there will be large volumes of US beef going into Japan in the short term," said Meat and Wool chief executive Mark Jeffries.

Japanese industry experts have said they do not expect US beef back in supermarkets for several months.

Jeffries said the return of US beef was inevitable and would have an impact on the New Zealand sales.

But he was optimistic New Zealand could hold on to some of its gains.

"It would be naive to pick where we'll end up but given that we've exposed our grass-fed beef to Japanese consumers who would never otherwise have tasted it, we hope that there is some ongoing loyalty," he said. "Before this, many Japanese wouldn't have known our beef was there."

New Zealand's BSE-free status appeals to Japanese consumers, although they have traditionally preferred the taste of grain-fed US beef.

A survey last weekend by Japan's Asahi newspaper found that 63 per cent of consumers did not want to eat US beef.

Jeffries said US exporters were unlikely to flood the market even when they regained full access

They would return with money and marketing and promotion, but the US domestic market was so strong it was unlikely they would have a huge surplus to unload.

"The greater dynamic is that supply is tight worldwide."