Japan recovering from 1-2-3 punch

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Recovery efforts are under way in Japan to help it recuperate from the tragic earthquake that struck the country in March.

“It’s been a 1-2-3 punch for the Japanese”, says Phil Seng, president and chief executive officer with the U.S. Meat Export Federation, who recently spent 10 days in Japan to assess the situation. Seng shared his experiences during a Webinar hosted by the Beef Checkoff last week.

Between the earthquake, tsunami and all the other problems associated with the Fukushima nuclear plant, it’s been one of the largest man-made and largest natural disasters to hit a modern country, says Seng.

And, just when you think things couldn’t get any worse, a few cases of suspected foot-and-mouth disease have been reported. Fortunately, the results from the suspected cases turned out to be negative.

Seng says his first impression when he arrived in Tokyo was that half the lights were turned off.

“Things you would take for granted -– escalators and elevators are turned off,” he said. More than 20 percent of the country’s power has gone down, which has had lingering effects and will have far-reaching impacts moving forward.

There has been a tremendous displacement of people. More than 100,000 people from the affected areas are without homes. Temporary shelter is being built by the government for the displaced people.

A long recovery is expected for the agriculture industry in Japan. In the nuclear evacuation region, a 20-kilometer radius of the damaged Fukushima nuclear plant, estimated losses are 4,000 head of cattle (dairy and beef), 30,000 hogs and 600,000 chickens. All of these animals had to be abandoned and are now presumed dead. More animals are expected to be destroyed as the country moves forward with recovery, notes Seng.

Nikkei Newspaper reports the agricultural damage in Japan’s five most impacted prefectures or states is estimated to exceed $10 billion. The estimated loss in production capacity is nearly $500 million, or about 3 percent of these prefectures’ annual production.

Japan’s fishing industry has also endured severe losses, both in operating capacity and uncertainty regarding nuclear contamination. This is also an important aspect of Japan’s protein market.

Seng notes that while 2 percent of Japan’s economy came from the afflicted area, this is a significant area from the standpoint of agriculture production. The impacted region represents 16 percent of pork production, 12 percent of beef, 20 percent of poultry and 17 percent of dairy.

Most of the production from this region went into Tokyo and the greater Tokyo area. Approximately 40 percent of Japan’s gross domestic product comes from the Tokyo area. Without these agriculture products flowing into Tokyo, the country has two choices, says Seng. Make it up with increased production, which seems unlikely, or make it up with increased imports. “We see increased imports as the much more likely possibility, especially in the short-term.”

However, damages sustained by the ports in Japan are still rendering huge disruption as far as Japanese distribution of products goes. One-hundred-seventy-five ports were damaged due to the tsunami.

Some normalcy is returning with the restart of the bullet train, notes Seng.

The U.S. Dairy Export Council says it is still too early to tell the impact the events in Japan will have on U.S. dairy exports. “At the moment, the country is still trying to get a handle on the extent of its dairy needs going forward so they haven't made any decisions regarding this year's dairy quota/imports,” says a U.S. Dairy Export Council spokesperson.


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