【News】 Prices for Japanese Wagyu calves remain high, hitting hard on cattle fattening farms (Sept. 3, 2014)


 

Yuji Hosoda

Average price of Japanese Wagyu calves marked JPY553,984 per head in August, up 0.4 percent from the previous month, topping the 500,000 yen mark for 12 consecutive months, according to the National Federation of Agricultural Co-operative Associations (JA Zen-Noh).

The prices are maintained at a level 10 percent higher than a year before. The prices have been posting a year-on-year drop for three consecutive months until July, but increased again in August as the number of marketed cattle marked the year’s lowest of 20,949. Market dealers worry that the recent trend of high sustained prices would be a disaster for the whole beef production industry, as higher production costs could force more cattle fattening farms to give up farming, leading to a reduction of farmers who buy calves, thus having impact also on cattle breeders in the future.

The average prices of Wagyu calves nationwide continue to maintain the level of roughly JPY60,000 to 100,000 higher than a year before. This is mainly due to a decline in the number of farms and the number of breeding cows after the March 2011 earthquake and tsunami. According to the agriculture ministry, the number of breeding cows totaled 595,000 in the current fiscal year, down 23,000 from the previous year.

Out of 36 markets nationwide which traded cattle in August, cattle prices rose at 16 markets. In the major cattle breeding region of Kyushu, 80 percent of markets saw price drops compared with the preceding trading, but on a year-on-year basis, the prices were up more than 10 percent in almost all the markets. The increase was especially large in eastern Japan.

The number of marketed cattle dropped 8,000 from the previous month. The prices stayed high, as the markets were closed during the Bon holidays.

At a market in Miyagi Prefecture operated by JA Zen-Noh Miyagi, the average price per head marked this year’s record high of JPY583,655 in August, up 5.5 percent from the previous month. A JA Zen-Noh Miyagi official says the market was crowded every day with people seeking to buy cattle as it marketed the largest number of cattle in Honshu, amounting to 1,108, while other markets remained relatively inactive.

Although buyers become increasingly cautious toward the continuing trend of high prices, the prices are likely to stay high as more trading is expected from September. Even under such a condition, a JA Zen-Noh official in Kyushu says cattle fattening farms have to continue buying cattle because leaving barns empty will not lead to any profit. The official says that although it depends on the prices of carcasses, there is no doubt the business environment of cattle fattening farms will worsen, as prices of feed and agricultural materials are rising in addition to soaring prices of calves.

(Sept. 3, 2014)

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