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									Des Moines Register
07-28-06

Japan lifts 2003 ban on U.S. beef; Iowa plants to resume shipments

BY PHILIP BRASHER AND JERRY PERKINS
REGISTER BUSINESS WRITERS

Washington, D.C. - Japan has finally ended a ban on American beef imposed
after the first U.S. case of mad cow disease in 2003, but industry officials say it
could take years for the trade to fully recover.

Japan approved exports Thursday from 34 U.S. facilities, including two in Iowa, a
Tyson Foods slaughter plant at Denison and Iowa Pacific Processors of Des
Moines, a company that once specialized in supplying Japanese restaurants.

"It's been what, since December of 2003?'' said Mike Everett, president of Iowa
Pacific. "I think we're ready to re-engage that line of business."

Industry officials say it will take a long time to recover the confidence of
Japanese consumers and restore trade to what it was in 2003 when Japan
imported $1.4 billion worth of U.S. beef. Mexico has since replaced Japan as the
No. 1 market for U.S. producers.

"It's going to be a slow market to develop on the beef side," said John
Lawrence, an economist at Iowa State University. "We're going to have to
earn those beef exports back."

Analysts say the resumption of beef trade with Japan should protect cattle
producers from a drop in prices as they increase production during coming
months. But analysts say the exports are not likely to be significant enough to
boost the price of cattle or consumer costs anytime soon.

Japan is allowing imports from all but one of 35 packing plants that Japanese
inspectors audited during the past month for compliance with its restrictions.
Imports will be restricted to beef from cattle that are no older than 20 months.
The one plant that was not approved is transitioning to new owners, according to
the U.S. Agriculture Department.

Agriculture Department officials have pressed the Japanese without success to
ease the age restriction.

"This has been a long process as we've confirmed that our system is in full
compliance with Japan's import requirements and provided Japan with clear,
scientific data confirming that American beef is extremely safe," Agriculture
Secretary Mike Johanns said.
Japan banned imports after the case of mad cow disease was reported in
Washington state shortly before Christmas 2003. The embargo was briefly lifted
in December 2005 but re-imposed after banned spinal material was found in a
shipment of veal.

Australia has since taken over much of the beef market that American suppliers
once filled.

Phil Seng, president and chief executive of the U.S. Meat Export Federation, said
the Japanese decision was closely watched by other Asian markets that are still
closed to U.S. beef, including South Korea.

"It gives a lot of countries the confidence to go forward as well," Seng said.

He said he expected Japan to import 30,000 to 40,000 metric tons of beef this
year, well under the pace of trade before the 2003 ban, when Japan typically
imported more than 20,000 metric tons a month.

He said the resumption of beef trade was unlikely to hurt exports of U.S. pork,
which have increased by 32 percent from 2003 to 2005.

Japanese poultry consumption has been on the decline, while "demand for pork
has increased in Japan.'' Seng said. "I would see the pork market continuing to
roll along."

The Japanese ban frustrated U.S. cattle producers even though domestic
demand kept cattle prices strong. In June, the Iowa Cattlemen's Association had
endorsed imposing sanctions on Japan if the embargo continued.

Tyson, the nation's No. 1 beef processor, hopes to begin shipping to Japan within
a week to 10 days, spokesman Gary Mickelson said. All nine of Tyson's U.S.
beef plants were approved for export to Japan.

The Denison plant handles cattle from Iowa and surrounding states. Iowa-raised
cattle also are slaughtered in Tyson plants at Dakota City, Neb., and Joslin, Ill.

Mickelson said sales would be limited because of the age limit and age-
verification process required by the Japanese.

"We're hopeful the Japanese will now consider bringing their requirements in line
with other countries by accepting cattle less than 30 months of age," he said.

Iowa Pacific Processors was forced to look domestically for markets after the
2003 ban and began selling beef to restaurants and institutions, Everett said.
His company, which employs 45 people, expects to ship some beef to Japan in
August.

"The U.S. is going to have to start over from square one," Everett said.

"The Japanese are going to be inspecting 100 percent of every box that goes into
that country. Until the U.S. industry can prove itself and that consumer
confidence with the Japanese increases, then I think it's going to be a very slow
process."

Bill Couser, owner of Couser Cattle Co. near Nevada, has hosted numerous
delegations of foreign cattle buyers during the years.

"Iowa beef has a good reputation overseas for consistent quality," he said,

However, getting U.S. beef back into the Japanese market won't come easy, he
said.

"We're going to have to earn that market back," he said. "Is it going to take a
week, a month or a year? I'm sure that when we do get our market back, it will
help us down the road. Exports always help."

Reporter Philip Brasher can be reached at (202) 906-8138 or
pbrasher@dmreg.com

								
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