Michigan ranchers and exporters may see an increase in the value of their livestock thanks to a more wide-open market.
Earlier this month, the United States Department of Agriculture announced the U.S. has gained full access to an Asian export market.
All cattle that are grown in the U.S., regardless of age, can be exported to Japan, its largest international beef export market in the world. Previously, cattle over 30 months and products associated with it were not allowed to be exported to Japan.
The ban was lifted after it was enforced in 2003 following the discovery of a BSE positive (bovine spongiform encephalopathy) cow (also referred to as mad cow disease) in Washington state. Afterward, all cattle were denied entry into the country. Over the course of the next 16 years, Japan gradually lifted certain restrictions.
In 2005, the Asian country restored access for U.S. beef muscle cuts and offal items from cattle 20 months and younger. In 2013, Japan allowed for beef and beef products from cattle less than 30 months of age, according to the U.S. Department of Agriculture.
“We really understand a lot more about that disease now,” said Joe Schuele, director of communications for the U.S. Meat Export Federation. “In the early stages, there was a belief that perhaps it only existed in older cattle, but as time has gone on, we’ve (created) testing programs and (put) safeguards in place. So, there is really no risk to human health. So, gradually (Japan) has been eliminating its BSE-related restrictions. Japan is really significant, and it is our largest market. So, having full access will generate quite a bit of business.”
Schuele said that last year, the U.S. brought in $2 billion in export revenue from Japan, which is a fourth of what the U.S. exports globally. The USMEF estimates the removal of the cattle age restriction will increase exports to Japan from 7% to 10% or by $150 million to $200 million per year.
“Some people may say that $200 million doesn’t sound like a lot, but that is as much beef we export to the European Union,” Schuele said. “That is as much beef we export to the Middle East. It is like opening an entirely new market, but we can expand into Japan because it is so large.”
In terms of cattle and calves, there are 1.15 million heads in the state of Michigan as of January.
According to the USDA National Agricultural Statistics Service, there are about 108,000 beef cows, 422,000 dairy cows and 150,000 cattle on feed. The remaining animals are in different classes.
With about 1.15 million cattle and calves in the state, George Quackenbush, executive vice president of Michigan Cattlemen’s Association, said Michigan residents consume more beef than the state produces.
“In terms of our total cattle inventory, (Michigan) ranks 27th among the states,” he said. “We ranked 16th in terms of cattle on feed in 2018.”
While Michigan does import beef from other states, Quackenbush said there are parts of the cattle that residents do not eat and are exported.
The USMEF said Japanese buyers, who purchase beef muscle cuts from over-30-month cattle, are most likely to include short plate, chuck eye rolls, short ribs, middle meats, clods and briskets.
“Beef variety meat items most likely to be in demand include outside skirts, hanging tenders, mountain chain tripe, tongues, abomasum and intestines,” per the USMEF. “The ability to use beef from over-30-month cattle will also lower costs for companies exporting processed beef products to Japan.”
Schuele said it is difficult to determine how much beef Michigan will export to Japan overall.
“We don’t really break down (cattle) export by state because it is misleading,” he said. “With cows, it is only going to show where the animal was slaughtered. For example, the calf might be raised in Michigan and it might go to a feedlot in Illinois and be exported from Iowa. However, (Michigan) ranchers should see a little bump in value for their … mother cows that are being retired and also for dairy farmers when they retire animals. They should have some value.”