December 11, 2019 334 PM
TEXAS — Ranchers in the Lone Star State are celebrating after Japanese lawmakers approved a trade agreement with the United States.
After almost a year of negotiations between President Donald Trump and Japanese Prime Minister Shinzo Abe, the Japanese Diet — the country’s congress — last week gave final approval for the deal, which is known simply as the U.S.-Japan Trade Agreement.
Under the agreement, which is set to go into effect at the start of 2020, Japan will eliminate or reduce tariffs on some U.S. goods. Around 90 percent of agricultural and food exports will be duty free or have “preferential tariff access,” according to a factsheet from the Office of the United States Trade Representative.
In exchange, the United States will also reduce or remove tariffs on certain Japanese goods, including bicycles, bicycle parts and musical instruments.
Agriculturalists across the country welcomed the news. The American Farm Bureau Federation called it a “win for farmers.” The National Cattlemen’s Beef Association called it a “tremendous victory” and “a great day for America’s beef producers and Japanese consumers.” And the U.S. Meat Export Federation said the plan “opens new opportunities” and “greatly improve[s] access for U.S. red meat in Japan.”
Closer to home, the Texas and Southwestern Cattle Raisers Association is also celebrating the deal — saying that the agreement further improves “the robust relationship between American ranchers and Japanese consumers.”
“We applaud Japan’s final passage of the U.S.-Japan Trade Agreement and look forward to its implementation,” Robert “Bobby” McKnight, Jr., the group’s president, said. “We sincerely thank everyone who was involved in securing this landmark agreement.”
Japan is the top export consumer of U.S. beef. A dense and mountainous island nation with little room to graze cattle, it often turns to the United States to feed consumers.
In part for that reason, U.S. beef exports to Japan far outpaces Mexico, which has more people but also more room for ranches. While Canada and Mexico buy, respectively, about $745 million and $1 billion worth of U.S. beef products per year, Japan spends more than $2 billion, McKnight said. South Korea is close behind, at around $1.7 billion.
“That’s a lot of product, but we’ve got room for more,” McKnight said.
Ranchers are also eyeing markets in China, which has over 1.3 billion people and a growing middle class. As families across the world rise into the middle class, they, on average, consume more meat, as studies have shown.
If every person in China ate just one hamburger per week, that could mean tons of new customers, McKnight says of the country’s growing market.
Like all commodities, the price of beef and cattle can fluctuate due to supply and demand. Noting that 96 percent of the global population lives outside the United States, McKnight said export markets are important to keeping ranchers in the United States well paid.
On average, exports add $300 in value to each head of cattle, he said. That’s no small change in an industry where the profit margins can bottom out, especially during droughts, when ranchers have to spend more on feed to make up for low vegetation.
McKnight says consumers internationally appreciate the taste of American beef. It’s typically “grain-finished,” meaning cows are fed grains for, on average, the final 150 days before slaughter — but that varies based on weight. Feeding the cows grain marbles the meat and creates a “very flavorful product,” he said.
“Most of these countries, once they get American beef, they develop a taste for choice, grain-fed beef,” he said. “We have the best product in the world.”
