TheCropSite.com- news, features, articles and disease information for the crop industry

USDA GAIN: Oilseeds, Cotton, Sugar, Grain and Feed


27 November 2012

USDA GAIN: Japan Grain and Feed Update November 2012USDA GAIN: Japan Grain and Feed Update November 2012

Despite serious damage to infrastructure in major northern ports and feed mills caused by the Great East Japan Earthquake and Tsunami, as well as the surge in grain prices that followed, Japan’s feed industry has demonstrated the flexibility and resilience to avert disruption in feed production, which continues to be stable.
USDA GAIN Report - Oilseeds, Cotton, Sugar, Grain and Feed

Report Highlights:

As Japan’s Ministry of Finance announced import statistics ending September 2012 for corn and rye, Post has finalized the 2011/12 marketing year import numbers in their respective PS&Ds. Despite serious damage to infrastructure in major northern ports and feed mills caused by the Great East Japan Earthquake and Tsunami, as well as the surge in grain prices that followed, Japan’s feed industry has demonstrated the flexibility and resilience to avert disruption in feed production, which continues to be stable.

Overall Market Situation:

Japan’s Feed Stabilization Organization puts out monthly feed production data and a detailed breakdown of ingredient utilization ratios. The data are compiled annually based on Japan’s fiscal year (JFY): April through March. Japan’s feed industry speedily overcame the devastation caused by the Great East Japan Earthquake and Tsunami of March 11, 2011, and provided undisrupted supplies of feed to Japan’s livestock operators, maintaining the JFY 2011 aggregate production at the previous year’s level. Due to the surge in grain prices, however, feed ingredient utilization ratios show a significant shift from corn to wheat and rice.

Japan has a feed stabilization program, where a combination of a subsidy by the Ministry of Agriculture, Forestry and Fisheries (MAFF) and an industry fund help absorb sudden surges in the compound feed price. It is activated when the import costs of ingredients in a particular quarter exceed the average import costs of ingredients in the previous one year. As the graph below shows, since the second quarter of 2006, the subsidy has helped curb feed price increases to farmers. As grain prices declined in the fourth quarter of 2008, the subsidy ceased. Grain prices took another sharp rise in the last quarter of 2010 and the subsidy was once again activated, and with the exception of the fourth quarter of JFY 2011 (January-March 2012), farmers have been receiving this subsidy since. However, the price farmers pay for feed has increased over 10 percent, from 52,500 yen per metric ton (MT) in late 2010 to 58,050 yen in September 2012.

Rice Updates:

With the new crop harvest nearly complete, MAFF announced a paddy rice crop forecast for 2012 as below. Although data for upland rice production, normally only 5 to 8 thousand MT, are not available, this year’s rice harvest is expected to exceed 8,520,000 MT, an increase of 1.4 percent over last year. Post will revise the Rice PS&D when the production statistics, including upland rice production, become available.

Japan’s Rice Production

Source: MAFF
*Forecast as of October 15, 2012

Wheat Updates:

Wheat imports for MY 2011/2012 increased by nearly 500,000 MT over MY 2010/2011. Coupled with Japan’s domestic wheat production up in 2011/2012, stocks have built up. Although feed consumption of wheat is expected to continue to rise, Post anticipates that this demand will be met by drawing down on stocks. Given that Japan’s domestic production is expected to stay at the previous year’s level, the 2012/2013 imports are forecast to return to the 2010/2011 level.

Corn Updates:

The price surge of U.S. corn compelled Japanese importers to locate alternative suppliers. As a result, imports from East/Central European countries increased in 2012. However, due to quality concerns, as well as supply constraints, import volumes are still limited. Therefore, the feed mills were forced to shift from corn to other ingredients, particularly rice and wheat. As shown in Table 1, the ratio of corn in feed, which was stable at 49-50 percent for many years, has now dropped to 42-43 percent.

Rye Updates:

Rye is mainly used for feed in Japan. Due to its relative price disadvantage, however, its utilization ratio has declined from 1.5 percent ten years ago to 0.1 percent in recent months.

November 2012

DOWNLOAD REPORT:- Download this report here

Share This


Related Reports

Reports By Country

Reports By Category

Our Sponsors