Japan cattle inventory continues to drop - GAIN

Greater dairy cow slaughter, slower calf production contribute to drop
calendar icon 21 September 2023
clock icon 3 minute read

Cattle inventory in Tokyo forecast to drop in 2024 on greater slaughtering of dairy cows, slower calf production, and no live cattle imports in 2023 and 2024, according to a recent US Department of Agriculture (USDA) Global Agricultural Information Network (GAIN) report.

Beef production in 2024 is expected to be down as well. Inflation is hitting retail sales of beef although consumption in the food service sector by increasing foreign visitors will help power through the dampening effect of inflation.

USDA's Foreign Agricultural Service (FAS) projects that 2024 cattle beginning stocks will dip to 3.920 million head on increased dairy cow slaughter and no imports of live cattle in 2023. Dairy farmers slaughtered more cows in 2022 and 2023 to deal with excess milk production. Accordingly, beginning stocks of dairy cows are down for 2024. 

Japan will import nearly zero live cattle in 2023 and 2024, owing to trade difficulties such as a weak ye and high transportation costs, plus sluggish demand resulting from a narrowing price gap between domestic and imported beef calves.

Beginning stocks of beef breeding cows in 2024 will be down as struggling small-scale farm operators exit the business, and total calf production in 2024 will decline accordingly. 

FAS/Tokyo assumes that the slaughtering of cows to reduce excess milk production will end in early 2024 after balance is restored to milk supply and demand. Thereafter the pave of dairy cow slaughter will moderate to normal levels. In turn, 2024 total slaughter and total beef production will drop year on year. 

According to the latest statistics published by the Ministry of Agriculture, Forestry and Fisheries (MAFF), as of February 1, 2023, the number of beef operators in Japan dropped by 5% from 2022, although the total beef cattle herd size grew by 3%. Severe market conditions for cattle operations, namely, high costs and low market prices, drove many farmers rearing less than 200 heads of cattle to exit the market. 

Weak carcass market prices have depressed beef calf market prices, which in turn has pushed cow-calf operators to limit production or exit the business completely . Beef calf prices have been unstable in recent years after beef carcass prices crashed in May 2020 under demand shocks induced by the COVID-19 outbreak. 

After recovering to pre-COVID-19 levels, in May 2022 calf prices again dropped under the weight of boosts in supply as many dairy farmers responded to a milk surplus by using more Holstein cows to carry embryos of wagyu calves or to be impregnated with wagyu semen by artificial insemination.

Japan’s total slaughter from January through June in 2023 was up three percent; FAS/Tokyo projects that the full year’s total will be 1.125 million and beef production will expand about four percent from 2022. Tokyo still expects dairy cows to be slaughtered to reduce surplus milk capacity, but at a slower pace by year end.

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