Report Highlights:

The overall import share of U.S. corn continues to lag behind that of Brazil with prospects of recovery. Japan announced the 2013 production statistics for rice and barley, which show slight increases in production volume of 1.0 percent and 4.2 percent respectively. MAFF announced that their regulatory testing of U.S. wheat, showed no positive detection of GE wheat MON71800.

Overall Market Situation

Corn utilization remains around 42 percent.

Japan has a feed price stabilization program, whereby the combination of a subsidy by the Ministry of Agriculture, Forestry and Fisheries (MAFF) and an industry fund helps absorb sudden surges in the compound feed price. Following the significant grain price hike in the 2nd quarter of 2012, the subsidy was re-activated and absorbed a large portion of the cost increase. For the current quarter (January-March 2014), the subsidy was discontinued due to a slight drop in the market price of compound feed. As a result, the farmer’s purchase price increased from 65,200 yen to 65,400 yen per metric ton, the highest level on record.

Corn Update

Brazil continues to be the largest supplier of feed corn to Japan whereas the United States has maintained its leading share in food corn imports. The import share of the United States started to recover in May 2013. However, it plummeted again in the fall. Industry sources expect that the U.S. import market share will recover significantly as the new crop starts to arrive in Japan. However, U.S. import market share is not expected to recover to the pre-2012 level of over 90 percent, even if the price stays attractive, as Japanese users feel it is important to maintain a diversification of suppliers now that they have learned how to source and use corn from various countries.

Rice Update

On December 6, 2013, MAFF announced the 2013 rice production statistics. Overall production volume increased 1.0 percent over the previous year to 8.607 MMT (7.832 MMT, Milled ) as a result of a slight increase in planted area and a favorable yield due to an absence of inclement weather conditions throughout the growing season in most of the regions.

Wheat Update

Since the successful resumption of import tenders for Western White wheat on August 1, 2013, import tenders have been held regularly without disruption. On December 4, 2013, MAFF announced that their regulatory testing of U.S. wheat, including 170,000 metric tons of stocks MAFF had stopped releasing after the Oregon GE wheat incident, showed no positive detection of GE wheat MON71800.

Barley Update

On November 19, 2013, MAFF announced the 2013 barley production statistics. For two-row barley, the planted area shrank slightly but the production volume stayed at the previous year’s level due to improved yield, although yield was still below average due to rain during planting in some of the major growing areas. Six-row barley also saw a slight decline in planted area. However, due to an above-average yield, supported by favorable weather conditions, production volume increased 8.6 percent. Naked barley production increased nearly 20 percent over the previous year as a result of a slight increase in planted area coupled with a yield that was slightly higher than average due to favorable weather conditions. Aggregate barley production in Japan in 2013 reached 179,600 metric tons, up 4.2 percent from 2012