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Ranchers.net

Japan's Lifting Of US Beef Ban Could Knock Prices

CANBERRA (Dow Jones)--Japan's approval Thursday of the resumption of U.S. beef imports from selected processing plants will force prices down, said Peter Weeks, chief market analyst at marketing concern Meat & Livestock Australia Ltd. (MANDL.YY).

"Some of the Japanese buyers will be looking to bring those prices down; they've had very high prices for over two years," Weeks told Dow Jones Newswires.

"There's no doubt about that," he added, Japan was a huge consumer of U.S. beef before December 2003, when it imposed an import ban after the discovery in the U.S. of a case of bovine spongiform encephalopathy, or BSE.

The ban was initially lifted late last year, only to be reimposed in January, after inspectors found prohibited spinal material in a veal shipment from New York. Japanese buyers turned to Australia to help fill the gap left by the ban on U.S. beef. Australian beef exports soared, rising almost 25% to reach almost A$5 billion in value in fiscal 2004-05, with almost half destined for Japan.

But Japanese beef consumption fell by about a quarter over the same period, in part reflecting the impact of high prices. Weeks said the volume of Australian beef exports to Japan isn't likely to contract much, with the startup of U.S. exports initially likely to be "pretty slow."

Australian producers remain committed to supplying Japan with large volumes of beef, with no sign among feedlot operators of them winding back production, he said. Moreover, Japanese import protocols on U.S. beef are "pretty tough," he said.

There is plenty of room in Japan for the beef of both countries, he said. The first U.S. air freighted product could arrive in Japan within days, while sea freighted product will take several weeks, he said.
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