info@genesus.com
Last week we were in Tokyo, Japan. Considered the most populated city in the world at 37 million. Having grown up on a gravel road and a 10-acre farm it’s quite the difference.
Tokyo despite the huge amount of people seems to work efficiently with mass transit and roads moving people well.
As you travel from Tokyo downtown to Tokyo Narita Airport on expressway of about 40 miles (with no slowdowns) we saw large scale development of housing and commercial – industrial density for duration of distance we have never seen in our travels anywhere.
In Tokyo, there was major construction ongoing with large cranes in operation an indication of positive economic development.
Japan Pork Industry
Japan’s sow inventory is about 800,000 sows, 17 million market hogs most of the production is in the hands of family operations in the 200-sow range set up as farrow to finish. The family farm structure has been supported by a strong domestic pig price. Last week Japan’s carcass price was 725 JPY per kilogram (carcass $5.04 USD/kilogram or $2.29 USD/lb.). Any hog producer in North America would be ecstatic at getting about $500 per market hog. It’s no wonder every export pork country in the world fights to get pork into Japan.
The latest data indicates Canada, and the U.S. are the main suppliers of Pork to Japan, both countries having an equal market share of 25%. The next 3 main exporters to Japan are Spain, Denmark, and Mexico. The fact that Mexico (10%) is in the top 5 is interesting considering the higher price of hogs in Mexico and that it is a major importer of pork itself. The North American supplies have an advantage in the shorter distance to Japan than Europe. Japan prefers chilled not frozen pork an advantage to North America with the ability to deliver in less time. Cost of delivery means by ship; planes are too expensive.
We understand Japan imports about 50% of its pork consumption. If domestic slaughter is about 17 million, our farmer arithmetic indicates about 17 million hogs from somewhere are needed to fill imports. If USA – Canada 50% of imports, farmer arithmetic projects 8.5 million hogs needed. Certainly, a major customer and one all export countries need.
Japan has historically looked for better pork. Some USA – Canada plants have Japanese in plant to select carcasses. The Japanese definition of quality is higher marbled pork with more reddish color. Why? It tastes better. Go into a Japanese retail store and see the excellent product presentation on pork but almost any other food item. It’s truly amazing the effort put into product presentation. It’s obvious that it’s what Japanese consumers expect, there were no plies of slabs of frozen loins at $1.99 lb. as you see in North American stores.
It was refreshing for us in the meetings Japan that we were with industry people that recognize that a better tasting pork product is the key to consumer demand. As you have read forever from us this is what we believe at Genesus. We found Japanese producers are looking for even better consistent product produced at a competitive cost of production.
Japan wants tasty pork. As an industry we know Japan wants that pork. Many plants sort through many carcasses to find some that will work. It seems bizarre we know as an industry what good pork is, we sort it for Japan but then we sell the leftovers of the other white meat program to U.S. consumers. The largest wealthiest market in the world. We continue to marvel at our industry’s lack of market savvy while our industry continues to struggle with profitability and loss of meat protein market share.
Pork for sale in Japan by 100 grams (this pork is averaging over $12 USD/lb.)
Shibuya Scramble Crossing in Tokyo (World’s Busiest Pedestrian Crossing)
