In the first two months of 2011, Japanese consumers markedly increased their purchases of U.S. foods, spending 81 percent more on U.S. beef, and double-digit increases on pork, poultry, dairy, eggs and fresh vegetables.
Then disaster hit in the form of the March 11 earthquake, tsunami and, subsequently, nuclear crisis that will leave the country reeling for months. Although the island nation is unraveling the turmoil, the triple tragedy has done little to interrupt the growth in U.S. food shipments.
“In talking to my members, I don’t think there has been much change in that market to any extent. It’s a little slower to get things through the ports, but that’s all we’ve heard,” said Ken Gilliland, director of transportation and international markets for the Western Growers Association, which represents agricultural interests in Arizona and California. Japan is a top five market for many of the commodities grown by association members, and there have been no reports of lost sales or slowing sales, he said.
Because little containerized traffic traditionally ships through the northern Japanese ports directly affected by the disaster, few shipments of refrigerated goods had to be rerouted.
“The only problem I know of is a refrigerated container that was headed for Sendai,” said Bob Weiss, director of the Food Shippers Association of North America. “That had to be shipped into a different port.”
He said shipments to Japan are continuing normally; a container of broccoli was exported the week of March 25 — just two weeks after the earthquake.
And, although Japan struggles with a 20 percent reduction in electric power, a fact that could complicate operation of cold storage facilities, there have been no widespread reports of logistical problems in the warehouse sector.
“Japan’s cold chain is very developed and sophisticated, and somehow they’ve been able to manage,” said Jim Herlihy, a spokesman for the U.S. Meat Export Federation.
In the days following the disaster, the International Association of Refrigerated Warehouses said it had received a status report from member Nichirei Logistics Group, which is based in Japan. “Nichirei operates approximately 50 facilities (of their 90 facilities nationwide) within the critical zones in Northeast Japan,” the IARW said in its newsletter. “There has been considerable damage at these facilities varying from flooding to product dropped from racks to total power outages. Nichirei also reports that approximately 35 employees are currently missing. Despite these tragic setbacks, Nichirei remains committed to serving its customers and community.
“In a message, Nichirei leadership wrote, ‘Japanese society is expecting Nichirei to resume our food logistics chain as quickly as possible, since lack of food and water is quite a serious issue for the refugees and other people. We have recognized that we play a very important role in the food supply chain, and therefore our colleagues in Japan are working day and night at the moment.’ ”
IARW spokeswoman Tori Miller said the group had received no further damage reports or updates about the industry there. In 2010, there were about 28.8 million cubic feet of public refrigerated storage space in Japan as a whole and a total of 34 million cubic feet of cold storage.
Sidebar: In a Disaster, Relief Is on the Way.
The disaster’s biggest impact on food supply is the nation’s ability to produce crops, animals and fish, according to a report from Rabobank Food & Agribusiness Research.
“While the situation is still evolving, the domino effect of the disaster will likely result in more imports from trade partners, such as the U.S., Australia and China,” notes Jean-Yves Chow, Rabobank’s senior industry analyst for Northeast Asia and lead author of the report. “The radiation issues at the Fukushima (nuclear power) plant have heightened food safety concerns at a time when Japanese food self-sufficiency is already low. Japan may need to revise its food security strategy to manage the country’s risk.”
The report said more than a quarter of Japan’s domestic pork production, 18 percent of its beef production and 22 percent of its poultry production come from areas impacted by the earthquake, tsunami or radiation from the Fukushima nuclear plant. In addition, cold storage has been compromised by electricity loss, which could lead to the need for additional imports.
Rabobank said primary production damage in Japan’s pork, poultry and beef industries could translate into a loss of total meat output of between 70,000 tons and 350,000 tons, with the possibility that power shortages following the earthquake may have damaged large volumes of meat in cold storage.
Much of Japan’s seafood production was based in the area directly affected by the earthquake and tsunami, which destroyed many fishing ports and vessels, and washed away both aquaculture and wild seedbeds for key products such as scallops and oysters.
Another sector hit hard is produce. Rabobank’s report said the natural disasters destroyed vegetable farms and orchards in the northeastern part of Japan. “Excessive radioactive matter found in locally produced vegetables and fruits could harm local consumer confidence. As a result, vegetable and fruit imports are expected to increase in the coming months,” the report said.
Because of lags in reporting most exports, exact levels aren’t known for most commodities, but the U.S. Department of Agriculture said 2,500 metric tons of beef were shipped to Japan during the week of April 5.
Phillip Seng, head of the Denver-based USMEF, said U.S. meat producers are well positioned to sell increased volumes. Although most of Japan’s population was not directly affected by the natural disasters, Seng said there is a lingering unease in Japan that is affecting consumption and purchases. “I just got back from a trip there, and the first thing I noticed was that in the cities about half the lights are turned off and escalators are shut off,” Seng said. “There are over 100,000 people who are still refugees and living in shelters.”
He said the Japanese are being constantly reminded of the situation through numerous aftershocks. “I was there for nine days and felt 10 powerful tremors,” Seng said. Those factors combine to discourage nightlife and eating out, he said, while noting beef and pork are selling well in retail outlets, despite the drop in restaurant demand.
U.S. beef, which recently re-entered the Japanese market after being banned for years, has been steadily gaining a foothold, he said. In addition to Japanese acceptance of the products, he said U.S. actions following the disasters are resulting in good will for U.S. products. “Something that hasn’t been publicized is a substantial airlift by the U.S. military, a dirt airlift,” Seng said. “The U.S. military is flying dirt samples to the U.S. where they are being tested at land grant universities to determine radiation levels.
“So many things are going on in the relationship that are very endearing and will help as we go on,” he said. After the crisis dies down, Seng said he expects Japanese and U.S. officials to again discuss lifting restrictions on U.S. beef. He said those talks could begin this summer.
Contact Stephanie Nall at email@example.com.