DISASTER IN JAPAN HAS TERRIBLE HUMAN LOSS, MARKET IMPACTS EXPECTED
Japan is the United State’s largest export customer for corn. We’re keeping a close eye on that country as it recovers from the earthquake and subsequent tsunami. Major importing facilities in northern mainland Japan have been severely damaged by the natural disaster, causing some to be not operational for the time being. Representatives of the Illinois Corn Growers Association expressed condolences to the Japanese Embassy last week while in Washington, DC.
The affected area accounts for roughly 30 percent of Japan’s 25 million metric ton total compound feed production capacity. While the extent of actual damage is still being assessed, much of the damaged capacity is being covered by facilities coming back online and by increased production by feedmills in unaffected areas. Access to fuel is also an immediate problem in the area, not only for the feed and livestock industry.
At this time, we cannot accurately measure the damage and the length of time the industry needs to recover will depend on its resources and coordination with the central and local governments, and other industries.
“Buyers have asked to channel vessels to other ports or feed mills unharmed by the natural disaster. In addition, there are current plans to increase production at unaffected mills and ports and transport the products to the affected areas. The immediate challenges will be the availability of boats, uncertainty of inland road conditions and fuel supply issues,” said Mike Callahan, US Grains Council senior director of international operations.
In fact, energy and fuel supply shortages are critical issues impacting the poultry and livestock producers in affected areas.
“Farms typically hold a limited supply of feed on hand. The resumption of reliable and normal feed delivery to these farms is critical to the health and welfare of the animals. Moving the animals off the farm is also hindered by road conditions and lack of fuel,” said Tommy Hamamoto, USGC director in Japan. “In addition, some processing plants and milking facilities have sustained damage and lack the ability to operate at full capacity.”
USGC Associate Director in Japan Hiroko Sakashita said, “Feed mills are collaborating and coordinating feed production to cover all critical animal sectors. While it is unclear how long the recovery process will take, Japan has a nimble, well-prepared agricultural economy. It has good market resilience and usually recovers from outbreak of disease and natural disasters."
2010 US Corn, Sorghum, Barley and DDGS Exports to Japan
• Japan imported roughly 15.5 million metric tons (610 million bushels) of U.S. corn, valued at more than $3 billion. Japan is the largest U.S. corn export market, accounting for approximately 30 percent of annual U.S. corn export sales.
• Japan imported nearly 700,000 tons (28 million bushels) of U.S. sorghum, valued at $127 million. Japan captures roughly 27 percent of the U.S. sorghum export market making it the second-largest U.S. export market behind Mexico.
• Japan imported approximately 12,000 tons (551,000 bushels) of U.S. barley, valued at more than $2.7 million. Japan takes approximately 42 percent of the U.S. barley export market and is the second-largest behind Canada.
• Japan imported approximately 218,000 tons of U.S. distiller’s dried grains with solubles, valued at more than $38 million.