Japan. Grain and Feed Update. Jul 2014 Aug. 18, 2014
Falling U.S. corn prices have contributed to the recovery of U.S. market share in 2014. The price drop has led to a decrease in the ratio of wheat in feed. Last year’s two-month trade disruption caused by the discovery of GE wheat volunteers in an Oregon field doesn’t appear to have had a significant impact on the overall import of food quality wheat. However, Japan imported a large volume of feed wheat from Eastern Europe in fall 2013 (prior to the arrival in Japan of the new U.S. corn crop), ostensibly to substitute for short corn supplies.
Overall Market Situation
The Feed Stabilization organization issues a monthly feed report which provides feed production data and a detailed breakdown of ingredient utilization. During Japan’s fiscal year (JFY) 2013 (April 2013 – March 2014) the average corn utilization ratio was 43.64 percent, up nearly one percentage point from the previous year. Although this recovery appears slight, the ratio for the second half of last year was 45.17 percent, up 3 percentage points from the first half of the year, showing the recovery from the tight corn supplies resulting from the 2012 drought in the United States. Accordingly, use of sorghum and wheat in feed has decreased compared to the previous year.
Japan has a compound feed price stabilization program, where a combination of a subsidy by the Ministry of Agriculture, Forestry and Fishery (MAFF) and an industry fund helps absorb sudden surges in the compound feed price. MAFF has not yet determined the level of subsidy for the first quarter of 2014 (April - June). It will be decided in late July based on first quarter trade data and paid to farmers in August. Japan’s feed production continues to be stable with an annual output of approximately 24 million metric tons (MMT).
The United States is regaining its position as the leading supplier of feed corn to Japan, supplying 50 percent of the feed corn Japan has imported since October last year. The United States has traditionally been the largest supplier of food corn to Japan, and this has continued in the current marketing year, with the United States supplying over 83 percent of Japanese food corn imports. U. S. share of corn imports in total (feed corn and food corn combined) recovered rapidly from the low of 37 percent in December 2013 to a high of 94 percent in May 2014, as the import price has declined substantially.
Although imports of food wheat are slightly lower than in recent years, based on trade to date and monthly trends, it appears that last summer’s temporary disruption due to the finding of GE wheat volunteers in an Oregon field didn’t have a significant impact on the overall import of food quality wheat. However, more than 300 thousand MT of feed wheat from Eastern Europe (primarily Ukraine and Romania) was imported last fall to make up for short corn supplies