Mr Viral
Japan’s agrifood sector has faced many challenges in the past few years, ranging from multiple natural disasters to consistent pushbacks in making its way up from the bottom of the global food self-sufficiency list.
According to data from the Ministry of Agriculture, Forestry and Fisheries (MAFF), beef and dairy makes up around 42% of Japan’s total agri-food output, dwarfing rice (16%) and vegetables (24%), making the advancement of this sector a top priority.
“The beef and dairy sectors are very important, converting raw milk and raw beef into high-quality protein products for consumers to consume,” MAFF said via a formal statement.
“They play a very important role in supporting the local economy particularly in the rural and mountainous areas of Japan, as well as to boost tourism and improve food self-sufficiency, and the government is very keen to modernise these to simultaneously revitalise these local areas.
“Previously the main challenge for us was to keep up with supply, but in recent years the global situation has changed and food security risks have increased – we are seeing new challenges in the form of rising production costs, logistics, environmental issues, political issues, an ageing population and many more.
“We used to be able to rely on affordable, imported concentrated feed for our cows at any time, and previously expanded production scale and efficiencies based on the assumption this would always be available – this is no longer true, so we need to make big changes to ensure the viability of these industries.”
An important part of the new policy is to increase the resilience of the beef and dairy supply chains, which involves both long-term supply and demand management as well as risk management to handle potential natural disasters.
“It will be very important for Japan to reduce dependency on imported feed as this accounts for some 40% to 60% of dairy and cattle farming costs, and has only become worse due to the situation in Ukraine as well as the depreciation of the yen,” newly-published documents on the policy highlighted.
“So domestic feed will be an important area of development, and we also need to ensure the resilience of the supply chain to potential risks such as earthquakes.
“On January 1 2024, the Noto Peninsula earthquake resulted in extensive damage including facility destruction, wastage of beef and dairy products as well as injuries to the livestock, and whilst repairs were in progress further heavy rains caused even more damage, so we have been working continuously on integrated recovery and reconstruction efforts.
“In order to not be caught unprepared by such disasters moving forward, the government is encouraging more industry platers to take part in initiatives for advance preparation and risk mitigation – this includes the development of Business Continuity plans, rehearsals and trainings to handle disasters, property organisation and insurance, and more.”
Another important part of the policy is the upgrading of beef and dairy processing facilities throughout the country in order to increase efficiencies in the long run.
“Our data indicates that about half of all beef processing facilities in Japan are over 30 years old, but companies face many challenges to implement upgrades such as labour shortages and declining utilisation,” the policy added.
“These facilities are crucial to the industry as they act as the main link between the producers and the consumers to supply the final products for retail, but the reality is that many of these facilities only get slaughter and processing fees as their income so investment to undergo major renovations is just not possible.
“As such, MAFF is working to restructure many of these facilities and redevelop these as export-oriented plants to strengthen profitability, as in order for Japan to build a stable meat supply chain it is necessary to include export operations.
“Other modernisation efforts will include smart technologies such as agriculture machinery and milking robots which will also help the industry to deal with a declining workforce.”
Increasing demandApart from self-sufficiency, Japan also aims to expand demand for its meat and dairy products in the global market to ensure long-term growth.
“Currently about 60% of local consumer dairy demand is for domestic products, with the remaining 40% coming from imports,” MAFF said.
“This has been particularly significant in the cheese category, where the market is basically dominated by cheap imported cheeses – this has been largely due to a pricing differential resulting from structural constraints locally.
“Taking dairy farm incomes into consideration, we need to expand demand for soft cheeses as these have comparatively higher milk content, and to work on helping consumers understand the added value of choosing local dairy, e.g. longer shelf life and lower carbon footprint.”
