USDA Foreign Agricultural Service
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Required Report - public distribution Date: 11/2/2007 GAIN Report Number: JA7063 JA7063
Japan Poultry and Products Broiler Annual 2007
Approved by: Paul Spencer, Senior Agricultural Attaché U.S. Embassy Prepared by: Kakuyu Obara, Agricultural Specialist Report Highlights: High broiler meat prices, caused in part by high feed prices, are forecast to continue in Japan through 2008. Although imports of generic cuts, mainly from Brazil and the United States, are expected to bounce back, the increase is expected to remain modest, hampered by high prices. Imports of cooked products, mainly from Thailand and China, are expected to decline further. Lackluster demand for Chinese cooked poultry products is forecast in 2008, due in part to China’s negative food safety image. Japan is not expected to lift its avian influenza-related bans on uncooked poultry from China and Thailand in 2008.
Includes PSD Changes: Yes Includes Trade Matrix: No Annual Report Tokyo [JA1] [JA]
GAIN Report - JA7063
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Table of Contents Note: Outline of Japan’s Broiler Market Structure:..................................................... 3 2008 Outlook ...................................................................................................... 3 Tight Supply Situation to Persist in 2008 ............................................................... 3 Imports of Generic Cuts to Recover Modestly in 2008 .............................................. 3 Imports of Cooked Products to Decline Further in 2008 ............................................ 4 High Feed Cost to Trim Domestic Broiler Outputs Slightly in 2008 .............................. 4 2007 Summary Situation Update and Outlook....................................................... 4 Tight Supply Situation Prevails as Imports Squeezed ............................................... 4 Table 1. Japanese Monthly Household Consumption of Meat and Chicken....................... 5 Table 2. Monthly Average Wholesale Price of Domestic Broiler Cuts .............................. 6 Table 3. Monthly Average Wholesale Price of Imported Broiler Cuts .............................. 7 Table 4. Monthly Ending Poultry Stock Estimates ...................................................... 8 Table 5-a. Japanese Imports of Total Broiler Including Prepared Products ...................... 9 Table 5-b. Japanese Imports of Broiler Meat ............................................................ 9 Table 5-c. Japanese Imports of Prepared Broiler Products......................................... 10 Broiler PS&D Table ............................................................................................ 11
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GAIN Report - JA7063 Note: Outline of Japan’s Broiler Market Structure:
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Broiler meat makes up about 90% of Japanese poultry meat market, which includes both domestic production and imports. Spent laying hens account for about 10% of the poultry meat market with the consumptions of ducks, turkeys, and other poultry being very limited. Japanese government data suggest that about 60% of poultry products are used directly by households, 30% by the food service sector, and about 10% for processing. Households predominantly use domestic cuts. In general, leg meat (bone-less) is most preferred over breast meat. Japan’s food service sector utilizes large quantities of imported generic cuts, mainly from Brazil, including those bulk cuts to be processed into prepared products after entry into Japan. Some of U.S. bone-in leg cuts are utilized in this segment as well. Import figures discussed in the text of this report come from Japanese customs clearance data.
2008 Outlook
Tight Supply Situation to Persist in 2008 Through their trade in cooked poultry, China and Thailand accounted for nearly 18% of Japan’s 2006 total broiler consumption (1.939 million MT). Japan currently allows imports of only the cooked poultry products from MAFF inspected facilities in Thailand (56 facilities) and in China (91 facilities) as of Oct. 2007. Japan is not expected to lift its avian influenzarelated (highly pathogenic avian influenza H5n1) bans on uncooked poultry from China and Thailand in 2008, thus it is assumed that these counties will not be in a position to ship fresh poultry to Japan. Japan will maintain its continued reliance on frozen cuts from Brazil and the United States. Both Japanese importers and domestic producers are increasingly concerned about the world supply outlook and the price expectations for feed in 2008. Many traders consider it likely that high feed costs will keep broiler meat prices high in 2008. The relatively solid demand for broiler meat reported in EU, the Middle East and in China since 2007 also points to continued strong prices in Japan. In view of the above, the Japanese broiler market will likely continue to experience tight supply and solid dema nd in 2008 for both frozen and cooked products. Amid high market prices, total consumption is projected to fall slightly in 2006 to an estimated 1.913 million MT (generic broiler: down by 1% to 1.588 million MT, and imported prepared and processed products: down by 2% to 325,000 MT) with slightly weaker household consumption anticipated due to high prices. Ending stocks of the generic broiler meat will continue lower . Imports of Generic Cuts to Recover Modestly in 2008 However, 2008 total imports, due to continued high prices, are projected only up by 1% from a year before to 680,000 MT. This will mainly be due to a recovery in generic broiler imports, which more than offset a further decline anticipated in imports of cooked products (generic broiler cuts: up by 3% to 355,000 MT, and the prepared and processed products: down by 2% to 325,000 MT). Due to a tight supply and low stocks, Japanese importers are likely compelled to make increased purchases of high priced Brazilian boneless cuts in 2008. U.S. broiler meat is also expected to bounce back to the 30,000 MT level, assuming that low
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pathogenic avian influenza (LPAI) does not cause additional producing U.S. States to be ineligible to ship to Japan. Imports of Cooked Products to Decline Further in 2008 Due to substantial price hikes made by the exporters in 2007, imports of cooked products are expected to fall further in 2008, projected down by 2% to 325,000 MT. Especially, high priced Chinese cooked poultry products may continue to suffer, partly due to perceived negative image held in Japanese market over food safety related scandals. According to an industry press, China specializes in yakitori products (skewed grilled chicken), which account for 40% of Chinese cooked products exports to Japan (195,000 MT in 2006). Yakitori supply is expected to become very tight in 2008, in part because Thailand can not currently supply the same products as China. High Feed Cost to Trim Domestic Broiler Outputs Slightly in 2008 Due to high feeding cost, post projects lower domestic broiler output in 2008, down by 1% to 1.225 million MT. Also, continued high prices for the domestic broiler cuts may cause a consumption shift to competitively priced imports in 2008. Meanwhile, high feed cost, high fuel and, high utility prices will put pressure on domestic producers to curb production in 2008.
2007 Summary Situation Update and Outlook
The revised Japan broiler PS&D tables for CY 2007 are constructed based on preliminary production, trade and stock data. Tight Supply Situation Prevails as Imports Squeezed For the first 8 months of 2007, high international prices for broiler meat, including cooked products, and unexpectedly solid domestic consumption, made the Japan market tight (table 1, table 3). Imports of generic cuts from Brazil and the United States were reduced (table 5and 5-b). Despite a sharp price increase of the Chinese cooked products since spring, Japanese imports kept up at roughly the same level as the previous year up until the third quarter. Imports are expected to slow significantly during the last quarter of 2007. An industry press source reports that reduced pork supplies and rising feed prices in China were the reasons for the substantial price hike. On the other hand, a series of food safety scandals has created negative perceptions of Chinese foods among Japan consumers and this is also a factor in lackluster demand, particularly at the retail level. Furthermore, given weaker than anticipated fourth quarter domestic production (based on the slightly lower number of chicks placed on feed due to hot summer), the broiler supply in Japan, coupled with reduced imports, will likely become much tighter in the coming months. Ending stocks have been depleted fairly quickly (table 4). In light of the above, Japan’s total broiler imports in 2007 are projected down by 6% from last year to 675,000 MT (generic meat: down by 7% to 345,000 MT, and cooked products: down by 4% to 330,000 MT). U.S. broiler meat, mainly bone-in leg, is also projected lower, down by 7% from a year before to 25,000 MT.
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Japan’s total broiler consumption in 2007 is projected down by 1% from last year to 1.925 million MT (generic broiler meat, both bulk domestic broiler and imported cuts consolidated: unchanged at 1.595 million MT and the imported prepared and processed products: down by 4% to 330,000 MT). The forecast decline is mainly owing to reduced sales of cooked products, mainly from China. Annual domestic output is projected up by 1% to 1.235 million MT in response to high market prices and relatively solid household consumption going into 2008 (Table 1 and table 2). There will be a significant reduction of carryover stocks left at the year beginning of 2007, estimated at 105,000 MT, down 14%. Table 1. Japanese Monthly Household Consumption of Meat and Chicken
Quantify Consumed Unit: Grams per Household Beef % Chg. 2006 Jan. Feb. Mar. Apr. May Jun. July Aug. Sept. Oct. Nov. Dec. 2007 Jan. Feb. Mar. Apr. May Jun. July Aug. Sept. Oct. Nov. Dec.
Average of Monthly Expenditures and Quantities of Selected Commodities and Services Purchased per Household (Two-or-more person households)
Pork 1,409 1,387 1,459 1,399 1,437 1,418 1,371 1,401 1,380 1,490 1,531 1,620 1,488 1,398 1,482 1,494 1,487 1,415 1,441 p1,370
% Chg. 0% 1% 0% -3% -2% 0% 0% 0% -3% -1% 0% 1% 6% 1% 2% 7% 3% 0% 5% -2%
Chicken 953 951 988 985 973 960 887 849 1,012 1,035 1,053 1,342 1,027 936 1,074 1,030 1,028 970 963 p900
% Chg. 2% 3% 1% 5% -3% 8% 2% -1% 7% 4% 2% 4% 8% -2% 9% 5% 6% 1% 9% 6%
556 516 541 546 570 574 575 603 529 573 551 747 578 504 569 602 594 544 562 p613
-3% -4% -8% -4% -12% 3% 4% -5% -5% -7% -5% -4% 4% -2% 5% 10% 4% -5% -2% 2%
Expenditures Unit: Ye ns per Household Beef % Chg.
Pork
% Chg.
Chicken
% Chg.
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2006 Jan. Feb. Mar. Apr. May Jun. July Aug. Sept. Oct. Nov. Dec. 2007 Jan. Feb. Mar. Apr. May Jun. July Aug. Sept. Oct. Nov. Dec. 1,751 1,540 1,696 1,647 1,705 1,576 1,662 p1,859 0 0 0 0 3% 2% 5% 0% 1% 1% 2% -1% -100% -100% -100% -100% 1,992 1,906 1,978 1,934 1,943 1,889 1,973 p1,931 0 0 0 0 5% 3% 3% 3% 1% 3% 5% 0% -100% -100% -100% -100% 932 874 941 913 893 852 868 p821 0 0 0 0 1,700 1,511 1,612 1,642 1,686 1,564 1,631 1,875 1,548 1,633 1,588 2,715 -4% -2% -5% -3% -8% 0% 0% 0% -4% -2% -3% -3% 1,897 1,856 1,927 1,877 1,932 1,842 1,879 1,940 1,915 2,005 2,012 2,167 0% 1% -1% -1% 0% -1% 0% 2% 1% 0% 1% 1% 890 861 886 891 874 835 801 767 904 941 967 1,252
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-5% -7% -9% -5% -13% -6% -8% -11% -4% -5% -6% -3% 5% 2% 6% 2% 2% 2% 8% 7% -100% -100% -100% -100%
Average of Monthly Expenditures and Quantities of Selected Commodities and Services Purchased per Household (Two-or-more person households)
Table 2. Monthly Average Wholesale Price of Domestic Broiler Cuts
Bone-less Leg Unit: Yen per Kg. 2003 Jan. Feb. Mar. Apr. May Jun. Jul. Aug. Sep. Oct. 734 690 644 594 552 524 491 502 551 597 2004 643 559 474 478 540 587 586 540 542 598 % chg. -12% -19% -26% -20% -2% 12% 19% 8% -2% 0% 2005 655 632 629 593 585 565 538 517 533 553 % chg. 2% 13% 33% 24% 8% -4% -8% -4% -2% -8% 2006 619 599 558 541 525 494 510 520 534 578 % chg. -5% -5% -11% -9% -10% -13% -5% 1% 0% 5% 2007 666 651 630 629 629 603 589 563 % chg. 8% 9% 13% 16% 20% 22% 15% 8%
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Nov. Dec. 1st Qtr Ave. 2nd Qtr Ave. 3rd Qtr Ave. 4th Qtr Ave. Year Ave. Breast Unit: Yen per Kg. 2003 Jan. Feb. Mar. Apr. May Jun. Jul. Aug. Sep. Oct. Nov. Dec. 1st Qtr Ave. 2nd Qtr Ave. 3rd Qtr Ave. 4th Qtr Ave. Year Ave. 224 210 195 184 192 212 225 233 224 206 210 230 210 196 227 215 212 2004 205 230 226 200 194 193 225 248 245 239 234 243 220 196 239 239 224 % chg. -8% 10% 16% 9% 1% -9% 0% 6% 9% 16% 11% 6% 5% -0% 5% 11% 5% 2005 218 214 224 217 223 218 228 235 226 231 238 248 219 219 230 239 227 % chg. 6% -7% -1% 9% 15% 13% 1% -5% -8% -3% 2% 2% -1% 12% -4% 0% 1% 2006 234 233 220 211 204 192 205 215 217 228 229 234 229 202 212 230 219 % chg. 7% 9% -2% -3% -9% -12% -10% -9% -4% -1% -4% -6% 5% -8% -8% -4% -4% 219 210 636 657 689 557 515 630 598 596 663 559 535 556 619 567 -6% 1% -19% -4% 8% -2% -5% 564 596 639 581 529 571 580 -5% -10% 14% 9% -5% -8% 2% 593 638 592 520 521 603 559 5% 7% -7% -10% -2% 6% -4% 649 620
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10% 19%
2007 230 215 213 209 211 211 218 240
% chg. -2% -8% -3% -1% 3% 10% 6% 12%
-4% 4%
Source: ALIC Monthly Statistics
Table 3. Monthly Average Wholesale Price of Imported Broiler Cuts
Unit: Yens per Kg. Imported: Brazilian Bone-less Leg (Frozen) 2003 Jan. Feb. Mar. Apr. May Jun. 310 310 310 311 317 349 2004 350 459 444 411 408 407 % chg. 13% 48% 43% 32% 29% 17% 2005 378 370 370 397 403 403 % chg. 8% -19% -17% -3% -1% -1% 2006 415 413 395 391 388 388 % chg. 10% 12% 7% -2% -4% -4% 2007 450 450 450 450 405 435 % chg. 8% 9% 14% 15% 4% 12%
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Jul. Aug. Sep. Oct. Nov. Dec. 1st Qtr Ave. 2nd Qtr Ave. 3rd Qtr Ave. 4th Qtr Ave. Year Ave. 390 390 350 340 332 329 310 326 377 334 337 384 380 378 373 378 378 418 409 381 376 396 -2% -3% 8% 10% 14% 15% 35% 25% 1% 13% 18% 401 398 398 400 415 415 373 401 399 410 396 4% 5% 5% 7% 10% 10% -11% -2% 5% 9% -0% 388 388 388 423 450 450 408 389 388 441 406 -3% -3% -3% 6% 8% 8% 9% -3% -3% 8% 3% 453 453 0 0 0 0 450 430
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17% 17% -100% -100% -100% -100% 10% 11%
Imported: U.S. Bone-in Leg (Frozen) 2003 Jan. Feb. Mar. Apr. May Jun. Jul. Aug. Sep. Oct. Nov. Dec. 1st Qtr Ave. 2nd Qtr Ave. 3rd Qtr Ave. 4th Qtr Ave. Year Ave. 289 288 284 283 289 310 315 318 319 320 320 318 287 294 317 319 304 2004 309 344 345 346 354 372 383 383 376 347 330 324 333 357 381 334 351 % chg. 7% 19% 21% 22% 22% 20% 22% 20% 18% 8% 3% 2% 16% 22% 20% 4% 15% 2005 316 289 280 280 280 280 282 283 283 291 313 313 295 280 283 306 291 % chg. 2% -16% -19% -19% -21% -25% -26% -26% -25% -16% -5% -3% -11% -22% -26% -8% -17% 2006 313 313 313 309 307 307 307 307 307 324 330 330 313 308 307 328 314 % chg. -1% 8% 12% 10% 10% 10% 9% 8% 8% 11% 5% 5% 6% 10% 9% 7% 8% 2007 330 330 330 330 330 332 387 445 0 0 0 0 330 331 % chg. 5% 5% 5% 7% 7% 8% 26% 45% -100% -100% -100% -100% 5% 7%
Source: ALIC Monthly Statistics
Table 4. Monthly Ending Poultry Stock Estimates
Unit: Metric Ton 2004 Jan. 94,163 Feb. 88,381 Mar. 92,965 Apr. 85,873 May 91,218 Jun. 87,201 2005 93,189 90,333 90,039 91,503 97,408 104,239 % chg. -1% 2% -3% 7% 7% 20% 2006 134,906 142,256 140,687 147,163 157,183 162,635 % chg. 45% 57% 56% 61% 61% 56% 2007 129,058 123,407 117,390 113,498 119,946 117,685 % chg. -4% -13% -17% -23% -24% -28%
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Jul. 88,593 110,889 Aug. 88,192 118,552 Sep. 89,655 120,846 Oct. 88,353 125,384 Nov. 93,455 127,218 Dec. 87,988 120,371 Source: ALIC Monthly Statistics Note: Figures represents the poultry Majority is imported broiler cuts. 25% 34% 35% 42% 36% 37% 163,459 159,694 147,732 137,136 133,603 121,605 47% 35% 22% 9% 5% 1% 117,583 116,662 0 0 0 0
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-28% -27% -100% -100% -100% -100%
meat estimates. Over 70 % is imported poultry cuts.
Table 5-a. Japanese Imports of Total Broiler Including Prepared Products
Unit: Metric Ton (Customs Clearance Basis) % Change Rank 0 1 2 3 4 5 Country --World-Brazil China Thailand United States Others 2005 Jan/Aug 484,339 251,770 111,561 94,275 18,799 7,933 2006 Jan/Aug 504,218 254,317 129,203 96,510 19,704 4,484 2007 Jan/Aug 450,599 208,417 133,904 91,543 13,837 2,899 - 07/06 Jan/Aug -11% -18% 4% -5% -30% -35%
Source of data: Japan Customs (World Trade Atlas) Unit: Metric Ton (Customs Clearance Basis) % Change Rank 0 1 2 3 4 5 Country --World-Brazil China Thailand United States Others 2004 Jan/Dec 582,000 298,687 131,702 110,789 29,770 11,052 2005 Jan/Dec 748,224 381,954 179,406 146,044 29,383 11,437 2006 Jan/Dec 715,643 338,087 195,363 148,288 27,910 5,995 - 06/05 Jan/Dec -4% -11% 9% 2% -5% -48% -06 ShareJan/Dec 100% 47% 27% 21% 4% 1%
Source of data: Japan Customs (World Trade Atlas)
Table 5-b. Japanese Imports of Broiler Meat
Unit: Metric Ton (Customs Clearance Basis) % Change Rank 0 1 Country --World-Brazil 2005 Jan/Aug 275,858 248,884 2006 Jan/Aug 277,640 253,810 2007 Jan/Aug 224,496 208,205 - 07/06 Jan/Aug -19% -18%
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2 3 4 United States Philippines Others 18,550 1,643 6,780 19,392 87 4,352 13,679 1,469 1,143
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-29% 1590% -74%
Source of Data: Japan Customs (World Trade Atlas)
Unit: Metric Ton (Customs Clearance Basis) % Change Rank 0 1 2 3 Country --World-Brazil United States Others 2004 Jan/Dec 353,791 296,053 29,586 28,152 2005 Jan/Dec 419,119 378,465 28,924 11,729 2006 Jan/Dec 370,672 337,471 27,438 5,764 - 06/05 Jan/Dec -12% -11% -5% -51% Jan/Dec 100% 91% 7% 2% 06 Share
Source of data: Japan Customs (World Trade Atlas)
Table 5-c. Japanese Imports of Prepared Broiler Products
Unit: Metric Ton (Customs Clearance Basis) % Change Rank 0 1 2 3 Country --World-China Thailand Others 2005 Jan/Aug 208,481 110,752 94,226 3,503 2006 Jan/Aug 226,577 128,888 96,499 1,191 2007 Jan/Aug 226,103 133,729 91,543 832 0% 4% -5% -30% - 07/06 Jan/Aug
Source of data: Japan Customs (World Trade Atlas)
Unit: Metric Ton (Customs Clearance Basis) % Change Rank 0 1 2 3 Country --World-China Thailand Others 2004 Jan/Dec 228,209 123,282 98,541 6,386 2005 Jan/Dec 329,106 178,428 145,983 4,695 2006 Jan/Dec 344,971 194,950 148,274 1,747 - 06/05 Jan/Dec 5% 9% 2% -63% Jan/Dec 100% 57% 43% 1% 06 Share
Source of data: Japan Customs (World Trade Atlas)
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Broiler PS&D Table
Japan Poultry, Meat, Broiler
2006 USDA Official Market Year Begin Inventory (Reference) Slaughter (Reference) Beginning Stocks Production Whole, Imports Parts, Imports Intra-EU Imports Other Imports Total Imports Total Supply Whole, Exports Parts, Exports Intra EU Exports Other Exports Total Exports Human Consumption Other Use, Losses Total Dom. Consumption Total Use Ending Stocks Total Distribution CY Imp. from U.S. CY Exp. to U.S. Revised Post Estimate 01/2006 103 620 120 1195 0 740 0 0 740 2055 0 2 0 0 2 1908 0 1908 1910 145 2055 35 0 103 620 120 1195 0 740 0 0 740 2055 0 2 0 0 2 1908 0 1908 1910 145 2055 35 0 Post Estimate New 01/2006 104 622 120 1227 0 716 0 0 716 2063 0 2 0 0 2 1939 0 1939 1941 122 2063 27 0 103 615 145 1185 0 725 0 0 725 2055 0 0 0 0 0 1915 0 1915 1915 140 2055 35 0 2007 USDA Official Estimate Post Estimate 01/2007 103 615 145 1185 0 725 0 0 725 2055 0 0 0 0 0 1915 0 1915 1915 140 2055 35 0 Post Estimate New 01/2007 105 625 122 1235 0 675 0 0 675 2032 0 0 0 0 2 1925 0 1925 1927 105 2032 25 0 0 0 140 0 0 0 0 0 0 140 0 0 0 0 0 0 0 0 0 0 0 0 0 2008 USDA Official Forecast Post Estimate 01/2008 0 0 140 0 0 0 0 0 0 140 0 0 0 0 0 0 0 0 0 0 0 0 0 Post Estimate New 01/2008 104 620 105 1225 0 680 0 0 680 2010 0 0 0 0 2 1913 0 1913 1915 95 2010 30 0 MM/YYYY (MIL HEAD) (MIL HEAD) (1000 MT) (1000 MT) (1000 MT) (1000 MT) (1000 MT) (1000 MT) (1000 MT) (1000 MT) (1000 MT) (1000 MT) (1000 MT) (1000 MT) (1000 MT) (1000 MT) (1000 MT) (1000 MT) (1000 MT) (1000 MT) (1000 MT) (1000 MT) (1000 MT) UOM
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