Historic, Archive Document Do not assume content reflects current scientific knowledge, policies, or practices. / l Cr- ?r- United States Department of Agriculture Economic Research Service Foreign Agricultural Economic Report Number 177 Japan’s Feed-Livestock Economy Prospects for the 1 980’s William T. Coyle Ag Subsidies Re 819192 x^uced in Europe The European Community will have to reduce its agricultural support programs and export sub- sidies in order to avert a budget crisis, according to a report by USDA’s Economic Research Ser- vice. Those reductions ought to make U.S. exports more competitive. Developments in the Common Agricultural Policy of the European Community examines how the EC’s farm program (CAP) may evolve, indicates potential price levels in various European coun- tries, and assesses the implications for trade with the U.S. and other countries. Sweden, although not a member of the EC, is also reducing its farm programs and farm expendi- tures. 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To subscribe to ERS Abstracts, just send your name and address to: Information Division (FA), Room 1664-S, U.S. Dept, of Agriculture, Washington, D.C. 20250 Developments in the Common Agricultural Policy of the European Community, FAER-172. By Timothy E. Josling and Scott R. Pearson. 80 pages, $5.50. Sweden's Agricultural Policy, FAER-175. By Marshall H. Cohen. 40 pages, $4.00. Available from Superintendent of Documents, U.S. Government Printing Office, Washington, D.C. 20250. Make your check or money order payable to Superin- tendent of Documents. For faster service, call GPO’s order desk at (202) 783-3238 and charge your pur- chase to your Visa, MasterCard, or GPO Deposit Ac- count. Bulk discounts available. The Livestock Numbers You Need Are Here USDA's indispensable yearbook of livestock numbers is now available. Livestock and Meat Statistics. Your comprehensive data source for cattle and calves, hogs, sheep and lambs. Includes production and inventories, number fed, marketings, slaughter, meat production, prices, per capita consumption, and trade. Puts under one cover the latest annual or monthly estimates from the Economic Research Service, Statistical Reporting Service, and Agricultural Marketing Service. Provides up to a decade of historical data as well. 168 pages; 190 tables: $6.50 . Order Livestock and Meat Statistics, Supplement for 1981 to SB-522 from the Superin- tendent of Documents, Government Printing Office, Washington, D.C. 20402. Enclose check, money order, GPO deposit account number. Or charge to Visa or Mastercard (in- clude credit card number and expiration date). Now Off Press JAPAN’S FEED-LIVESTOCK ECONOMY: Prospects for the 1980’s, by William T. Coyle. International Economics Division, Economic Research Service, U.S. Department of Agriculture. Foreign Agricultural Economic Report No. 177. Abstract Japanese consumption of livestock products through 1990 will grow at a slower pace than in 1960-80. Expansion of Japan’s livestock industry will depend heavily on imported feedstuffs, mainly from the United States. By 1990, U.S. exports of grains and soybeans to Japan may rise by a third over current levels to about 20 million metric tons of grain and 6 million metric tons of soybeans. The Japanese market for imported beef will grow but that for imported dairy products, pork, or poultry will show little or no growth. Keywords: Japan, feed grains, livstock products, U.S. trade, projections. Acknowledgments The author thanks Effie McConkey and Pat Abrams for their help in typing the report. Lois Caplan made a significant contribution to the section on Japan’s livestock economy. Michael Lopez, Carmen Nohre, E. Wayne Denney, and Jitendar Mann made useful comments, many of which were incorporated into the study. The Office of the Agricultural Counselor, Tokyo, supplied a great deal of information, either in scheduled reports or in response to specific questions. The projections and conclu- sions are based on analyses undertaken by the Economic Research Service. Use of brand names and company names in this publication is for identification only and does not imply endorsement by the U.S. Department of Agriculture. Additional copies of this report can be purchased from the Superintendent of Documents, U.S. Government Printing Office, Washington, D.C. 20402. Ask for Japan's Feed-Livestock Economy: Prospects for the 1980's, FAER-177. Enclose a check or money order, payable to Superintendent of Documents, for $5.50 (price sub- ject to change). GPO pays the postage. For faster service, call the GPO order desk at (202) 783-3238 and charge your purchase to your VISA, MasterCard, or GPO Deposit Account. Discounts are available for purchases of more than 100 copies. Microfiche copies at $4.50 each can be purchased from the National Technical Infor- mation Service, 5285 Port Royal Road, Springfield, Va. 22161. Ask for Japan’s Feed- Livestock Economy: Prospects for the 1980’s, stock no. PB83-1 43941. Enclose check or money order, payable to NTIS. NTIS pays the postage. For additional information, call the NTIS order desk at (703) 487-4650. The Economic Research Service has no copies for free mailing. Washington, D.C. 20250 February 1983 Contents Page Summary jjj Introduction 1 The Role of Livestock Products and Fish in the Japanese Diet 2 Japan’s Livestock Economy 7 Beef Sector 10 Dairy Sector 15 Pork Sector 20 Egg Sector 24 Broiler Sector 26 Japan’s Fishery Industry 29 Japan’s Feed Supply 33 Formula Feed 34 Simple and Other Feeds 36 Government Policies 42 The Future of Japan’s Feed-Livestock Economy 48 Livestock Sector 51 Fisheries 51 Feed Supply 52 Conclusions and Implications for the United States 56 Bibliography 59 Appendix Tables 61 1. Japan: Demand elasticities for meat products and fish 2. Japan: Demand elasticities for dairy products 3. Japan: Demand elasticities for eggs 4. Japan: Components of formula feed, all livestock 5. Japan: Components of formula feed, beef 6. Japan: Components of formula feed, dairy 7. Japan: Components of formula feed, swine 8. Japan: Components of formula feed, poultry 9. Japan: Livestock inventories 10. Japan: Formula feed production by livestock category 11. Japan: Barley marketed as a single ingredient 12. Japan: Production of major livestock products Abbreviations JFY Japan fiscal year: April-March MAF Ministry of Agriculture and Forestry [1960-78] MAFF Ministry of Agriculture, Forestry, and Fisheries [1978 to present] MTN Multilateral Trade Negotiations TDN Total digestible nutrients LIPC Livestock Industry Promotion Corporation Summary Japan’s livestock industry is expected to expand less rapidly in the eighties than in the sixties and seventies. The United States will be an important supplier of addi- tional grain and soybeans required to support this expan- sion. Annual U.S. grain exports to Japan are projected to increase by about 20 percent, reaching about 20 million metric tons by 1990. Annual U.S. soybean exports to Ja- pan will probably increase by about 30 percent, reaching about 6 million metric tons by 1990. The Japanese market for imported livestock products will grow for beef and dairy products but decline for pork and poultry. U.S. ex- ports of beef to Japan could quintuple during the decade. Japanese demand for livestock products grew rapidly during the past 20 years, but per capita consumption of meat and dairy products is still low compared with other developed countries. Eggs are the only livestock product consumed in amounts comparable with other developed countries. Future consumption of livestock products will depend largely on income and population growth and changes in relative prices as well as changes in tastes and preferences. Limited pasture and forage area has constrained beef and dairy production and has led to substantial Government intervention to maintain producers’ income. Self-suffi- ciency in beef is likely to decline from 73 percent in 1978 to less than 50 percent by the end of the decade while that for dairy products should remain constant at about 90 percent. Poultry and pork production, increasingly reliant on con- fined feeding techniques, has required less Government protection and has undergone more rapid structural change than the beef sector. Self-sufficiency in pork and poultry products should remain high (close to or above 90 percent) and may even increase. The future of Japan’s fishing industry will largely deter- mine the future of its livestock industry. Fish is still the most important source of animal protein in the Japanese diet, providing about 50 percent of the total. The 200-mile fishing limits imposed by many coastal nations have re- duced Japan’s hauls from distant fisheries. An increased public commitment has helped to offset these losses by spurring large catches from Japan’s coastal waters and from marine aquaculture. But the total catch has re- mained between 10 million and 11 million metric tons since 1972, leading to reduced self-sufficiency, increased imports, and higher real prices. Adjustment in Japan’s fishery industry, the capacity of its coastal waters to sus- tain larger yields, and maintenance of minimum catches in foreign waters will be critical in providing sufficient low-priced marine products to the Japanese so as to pre- vent a major dietary shift to livestock products. ( Japan’s small arable land area, about 1 percent that of the United States, precludes extensive cultivation of feed crops. Pasture area is also quite limited, confined mostly to the less populated areas of Hokkaido and northern Honshu. Dependent on imports for about 70 percent of its feed supply, Japan is sensitive to the issues of continuity and security of feed supply. State trading, Government stockpiling, a feed price stabilization fund, supply- purchase agreements, and efforts to diversify sources of supply are among the measures adopted to secure sup- plies and stabilize prices. At present, expansion of Japan’s pasture and forage area is an important govern- ment priority. Growth in the number of grazing animals will probably parallel the expansion in pasture and fodder production. Japan is unlikely to succeed in its efforts to significantly increase its degree of self-sufficiency in feed and forage production. iii Japan’s Feed-Livestock Economy: Prospects for the 1980’s William T. Coyle Agricultural Economist Introduction The growth of Japan’s livestock economy during the eighties will depend heavily on U.S. exports of feed grains and oilseeds— commodities that annually rank as the lead- ing U.S. agricultural exports. During the seventies, the United States established itself as the top supplier to Japan for the three feedstuffs— corn, sorghum, and soy- beans—most vital to Japan’s livestock industry. More- over, Japan was a leading market for U.S. exports of these three commodities during this period. Japanese livestock feeding accounts for 80-85 percent of all coarse grain consumption in the country. Because only 2 percent of total coarse grain consumption is pro- duced domestically, massive amounts are imported each year. Since 1970, the annual rate of increase in coarse grain imports has been 5.6 percent— or an average in- crease in volume of about 800,000 tons per year. By 1980, Japan imported 18.7 million metric tons of coarse grains, with 84 percent coming from the United States, including about 90 percent of Japan’s corn and sorghum.1 Annual growth in soybean and meal imports (meal basis) during the seventies was about 3.7 percent, slower than for coarse grain because of slow growth in the food use of soybeans as well as diversification in the kinds of pro- tein meal used in feeds (rapeseed and animal byproduct meals, for example). The United States supplied more than 90 percent of Japan’s soybean imports and more than 80 percent of its soybean meal imports. The U.S. share of soybean meal imports declined through the seventies with increased competition from Brazil. ’The U.S. share of Japan’s coarse grain imports in 1980 was much higher than the average for 1970-79 (59 percent) because of the U.S. suspension of grain sales to the Soviet Union. Argen- tina, which had exported substantial quantities of sorghum to Japan during 1977-79, redirected most of its supplies to the Soviet Union during 1980-81. Over the past decade, Japan has taken one-fifth of total U.S. corn exports, half of U.S. sorghum exports, and more than one-fifth of U.S. soybean exports. The combined value of these three commodities represented about half of the total value of U.S. agricultural exports to the Japanese market during the seventies. Thus, the importance of the Japanese market for coarse grains and oilseeds should not be underestimated. At the outset of the eighties, it is important to look ahead and focus on future developments. Because 80-85 percent of Japanese coarse grain and oilseed consumption is used as feed, future imports will depend upon what happens to Japan’s livestock sector. The future shape of Japan’s feed-livestock economy will depend on: • The changing role of livestock products and fish in the Japanese diet. • Government trade and farm policy and its effect on the growth and development of the livestock sec- tor. • The ability of Japan’s fishery industry to adjust to limited access to foreign fishing grounds, and the public commitment to protect and promote devel- opment of domestic coastal resources. • The availability of feedstuffs, both imported and domestically produced. Each of the above subjects is discussed in this report, with particular attention to the 1960-80 period. The final sections derive projections to 1985 and 1990 of the pro- duction, consumption, and trade in finished livestock products, as well as the derived demand for feed grain and protein meal. 1 Japan’s Feed-Livestock Economy The Role of Livestock Products and Fish in the Japanese Diet The Japanese consumed practically no meat and dairy products until about 100 years ago. After World War II, meat and dairy consumption grew rapidly. This section examines the changing role of livestock products and fish in the Japanese diet during 1960-80. The choice of 1960 as a beginning point is somewhat arbitrary, although by then the physical damage of World War II had been re- paired, the economy was robust and growing at a rapid rate, and the Japanese diet was on the verge of unpre- cedented change. The dietary change over the 20-year period should, how- ever, be placed in perspective. Although consumption of livestock products increased three to four times between 1960 and 1980, the Japanese still consume relatively small amounts of meat and dairy products.2 Beef con- sumption, for example, was only 1.2 kilograms (kg) per person per year in 1960, by 1980 it had nearly tripled— but was still a mere 3.5 kg. Total meat consumption increased 2“Meat” in this report is defined as the edible flesh of mam- mals and fowls as distinguished from that of fish or shellfish. from 5.0 to 22.4 kg over the same period (tables 1 and 2), reaching a level one-fourth to one-third that of other de- veloped countries. By the end of the seventies, the Jap- anese diet was still predominantly vegetarian, with fish and rice of central importance. Livestock products con- tributed only 11 percent of total calories, compared with 28 to 34 percent in other developed countries (table 3). The consumption pattern that has evolved is best ex- plained by family income, the prices of livestock products and substitutes, cultural and religious values, and ur- banization. Real family income in Japan has grown over the past two decades along with an 8-percent annual growth in real Gross National Product (GNP). Private consumption ex- penditures grew at a slower rate (7.4 percent), because of the growing importance of other components of gross na- tional expenditures like trade surpluses and business in- vestment. The proportion of family income spent on food items fell from about 32 percent of disposable household income in the early sixties to about 24 percent in the last half of the seventies. The Japanese now spend a larger proportion of the family food budget on meat and fish, less on dairy products and eggs, and substantially more Table 1— Annual per capita consumption of livestock products and fish, Japan Japan Meat Dairy products *'scal Fluid Fish and year Beef Pork Chicken Other Whale Total Eggs milk Total shellfish Population Million 1960 1.2 1.3 .4 .5 1.6 5.0 4.9 10.7 22.3 27.8 93.4 1961 1.2 2.1 .8 .4 1.9 6.4 6.5 11.8 24.9 29.8 94.2 1962 1.3 2.7 1.0 .5 2.4 7.9 6.9 12.6 28.4 29.9 95.2 1963 1.6 2.3 1.2 .7 2.0 7.8 7.5 15.1 32.8 29.9 96.3 1964 1.8 2.6 1.4 .8 1.9 8.5 8.6 16.9 35.5 25.3 97.1 1965 1.5 3.1 1.6 .7 2.1 9.0 8.8 18.4 37.4 29.2 98.5 1966 1.3 4.1 2.0 1.0 2.0 10.4 9.2 20.2 41.7 29.2 99.0 1967 1.2 4.6 2.4 1.1 1.8 11.1 10.1 21.3 43.3 30.9 100.2 1968 1.4 4.3 2.6 1.3 1.4 11.0 11.7 23.0 44.8 32.3 101.5 1969 1.8 4.4 3.3 1.4 1.3 12.2 12.6 24.3 47.3 30.7 102.5 1970 2.0 4.7 3.8 1.1 1.5 13.1 14.8 25.3 50.1 32.1 103.6 1971 2.3 5.1 4.3 1.6 1.3 14.6 14.9 25.3 50.7 32.9 105.1 1972 2.4 5.6 4.7 1.5 1.2 15.4 14.6 26.5 51.9 33.6 106.3 1973 2.3 6.4 5.1 1.4 1.0 16.2 14.5 26.9 52.9 34.3 108.7 1974 2.5 6.5 5.1 1.6 1.1 16.8 14.1 27.0 52.0 35.0 110.1 1975 2.5 6.5 5.2 1.7 .9 16.8 14.0 28.2 53.3 34.6 112.0 1976 2.7 7.7 5.8 1.7 .7 18.6 14.3 29.4 54.6 34.8 113.2 1977 3.0 8.3 6.5 1.8 .7 20.3 14.4 31.0 57.0 34.1 114.0 1978 3.3 8.7 7.1 1.7 .5 21.3 14.9 32.1 59.3 35.5 115.3 1979 3.4 9.6 7.5 1.6 .4 22.5 14.7 33.3 61.9 34.5 116.2 1980 3.5 9.6 7.7 1.2 .4 22.4 14.6 33.9 62.2 34.8 117.3 2 Role of Livestock and Fish Table 2— Average annual percentage change in per capita consumption of livestock products and fish, Japan Item 1960-65 1965-70 1970-75 1975-79 1960-79 1972-85’ 1978-902 Percent per year Beef and veal 4.6 5.9 4.6 8.0 5.6 3.2 2. 8-3. 5 Pork 19.0 8.7 6.7 10.2 11.1 2.3 1. 7-2.3 Chicken 32.0 18.9 6.5 9.6 16.7 1.5 1. 8-2.3 Meat 12.5 7.8 5.1 7.6 8.2 2.1 1. 9-2.5 Eggs 12.4 11.0 - 1.1 1.2 6.0 .2 .06 Dairy products 10.9 6.3 1.4 3.9 5.5 1.8 1. 5-2.0 Milk 11.5 6.6 2.2 4.2 6.2 NA NA Milk products 10.4 6.0 .6 3.5 4.9 NA NA Fish 1.0 1.9 1.5 - .1 1.1 1.3 1.0 Per capita real GNP 8.5 10.4 3.5 4.9 6.8 NA NA Per capita real private consumption expenditures 7.8 7.9 4.5 3.9 6.2 5.0 3.7 Population 1.0 1.3 1.4 .9 1.2 1.0 .8 NA = Not available. 'Projections published in the Ministry of Agriculture and Forestry's Long Term Prospects of Production and Demand of Agricultural Products in Japan, August 1975. Projections published in MAFF’s The Long-Term Prospects for the Demand and Supply of Agricultural Products, November 1980. Source: Ministry of Agriculture, Forestry, and Fisheries, Statistical Yearbook, annual issues. Table 3— Annual per capita consumption of livestock products and fish, selected countries, 1975-77 averages Country Annual per capita consumption Per capita daily intake Protein from Total calories from Meat Dairy products Eggs Fish Protein Calories Livestock products' Fish Livestock products’ Fish Grams Argentina 118.8 78.9 7.4 2.9 110.2 3,359 63.6 1.1 29.1 .2 Australia 123.6 134.0 12.3 8.3 106.8 3,400 65.0 3.2 34.2 .6 Canada 101.8 134.8 12.8 9.9 101.1 3,345 60.8 3.8 31.9 .7 China 22.3 4.1 3.6 4.3 61.7 2,362 14.7 3.2 8.5 .5 Germany 83.5 97.4 17.1 6.1 85.3 3,361 59.1 4.1 28.6 .7 Hong Kong 72.9 9.0 12.9 44.3 81.5 2,671 41.2 17.4 24.0 3.2 Japan 25.4 33.3 15.8 43.9 86.1 22,848 22.1 26.1 10.8 6.2 Norway 51.3 215.2 9.1 19.4 87.4 3,124 55.7 8.6 29.1 1.7 South Korea 7.9 4.1 4.8 37.6 73.0 2,681 6.8 13.0 3.1 2.1 United Kingdom 69.7 171.5 13.1 10.9 91.5 3,311 56.3 4.6 28.4 .7 United States 114.2 152.1 15.9 8.1 106.1 3,538 65.4 3.0 33.9 .6 ’Excludes animal fats and oils. 2FAO numbers are not consistent with those published by the Government of Japan. Source: United Nations Food and Agricultural Organization, Food Balance Sheets 1975-77 averages and Per Capita Food Supplies 1961-65 averages 1967-77, Rome, 1980. 3 William T. Coyle on food consumed outside the home (in restaurants, for example). The proportion of expenditures on cereals, mainly rice, has declined, while the proportions spent on fresh vegetables, fruits, and processed foods have re- mained nearly constant. These changes in expenditures do not all reflect changes in quantities consumed. A shrinking share of the food budget was spent on dairy products and eggs since declining real prices more than offset increases in consumption (table 4). A number of studies (see appendix tables 1 through 3) have measured the income elasticity of demand for var- Table 4— Proportion of household food expenditures spent on livestock products, fish, and food consumed away from home, Japan Item 1963-65 1968-70 1973-75 1976-78 Total livestock 16.2 Percent 17.4 17.6 16.9 products Total meat 8.3 9.7 11.3 11.4 Beef 2.6 2.3 2.8 3.1 Pork' 3.2 4.4 5.0 4.9 Chicken 1.1 1.6 1.7 1.8 Dairy products 4.1 4.6 3.9 3.7 Fluid milk 3.1 3.5 3.0 2.8 Butter .3 .2 .1 .1 Cheese .1 .2 .2 .2 Eggs 3.8 3.1 2.4 1.8 Total fish 12.8 13.0 13.9 14.9 Fresh 6.6 7.0 7.6 7.9 Salted and dried 2.6 3.2 3.6 3.7 Processed 2.9 2.1 2.0 2.3 Canned .4 .3 .3 .3 Meals away from home 7.3 9.8 11.8 13.1 Food expenditures as a percentage of total liv- ing expenditures 38.3 34.7 32.2 30.8 Living expenditures as a percentage of disposable income 83.2 80.6 76.7 77.2 Food expenditures as a percentage of disposable income 31.9 28.0 24.7 23.8 ’Includes ham and bacon. Source: Government of Japan Statistics Bureau, Office of the Prime Minister, Annual Report on the Family Income and Expen- diture Survey, 1978. July 1979. ious livestock products consumed in Japan. Estimates from these studies indicate that meat consumption is more elastic with respect to income than is the consump- tion of eggs, dairy products, and fish. Estimates of the income elasticity of demand for fish for the period, 0.49 by Lopez and 0.58 by Kester, indicate that fish consumption has been less responsive to income change than has meat consumption (36, 30).* 3 However, despite the recent rapid growth in meat con- sumption, the Japanese eat more fish than all other meats combined. Growth in income has led to little in- crease in overall fish consumption per capita, but has shifted some demand away from lower priced products (mackerel and fish paste products) to higher priced luxury items (salmon and tuna). As their real household income grew, the Japanese began to eat out more often. Many of these meals feature either fish or livestock products. The share of the family food budget spent on meals outside of the home increased sharply from an average of 7 percent in 1963-65 to 13 per- cent in 1976-78. A comparison of food balance sheet data and family budget data indicates that as much as 30-35 percent of meat and 40-45 percent of fish are consumed outside of the home. Fast-food chains specializing in oc- cidental foods grew rapidly in the seventies and such companies as Nihon McDonald and Nihon Kentucky Fried Chicken expected to increase their outlets from about 450 in 1979 to 700 in 1981 (11). In 1980, these com- panies ranked second and eighth in the $60 billion Jap- anese restaurant and catering business.4 Although expen- ditures at western restaurants are a relatively small pro- portion of total away-from-home food expenditures, many Japanese restaurants also feature meat dishes like sukiyaki (beef) and yakitori (chicken). Real prices of most livestock products (except beef) have declined, encouraging the Japanese to eat more meat, while real prices for fish have increased (tables 5 and 6). As a result, the consumption of chicken, pork, eggs, and fluid milk has grown faster than consumption of beef and fish. The growth rates for consumption of eggs and dairy prod- ucts slowed considerably in the seventies due to noneco- nomic factors as well as price changes. ’Italicized numbers in parentheses refer to items listed in the Bibliography at the end of this report. 4 Nihon Keizai Simbun (English edition), May 5, 1981. 4 Role of Livestock and Fish Table 5— Average retail prices of livestock products and fish, Japan Year Beef and veal1 Pork1 Chicken1 Eggs2 (Tokyo) Fluid milk2 (Tokyo) Fresh fish and shellfish2 Consumer Price Index2 Private consumption expenditures2 Index Billion - 107 R i non yen 1960 549 642 483 NA 77 148 332 NA 1961 637 615 502 221 85 166 347 9,949 1962 702 569 686 229 94 183 371 11,500 1963 748 724 718 242 103 213 402 13,496 1964 804 753 721 227 104 228 417 15,656 1965 854 745 718 219 108 273 445 18,486 1966 1,050 694 724 240 108 277 468 21,437 1967 1,240 714 728 228 112 313 486 24,705 1968 1,420 849 744 241 116 356 512 28,632 1969 1,350 960 748 226 130 403 539 33,293 1970 1,370 909 767 267 135 485 580 38,647 1971 1,470 930 712 229 146 577 615 43,559 1972 1,510 992 724 238 146 598 645 50,267 1973 1,980 1,120 801 263 160 672 719 60,489 1974 2,450 1,240 960 341 214 879 894 73,629 1975 2,710 1,550 1,000 367 233 1,000 1,000 85,539 1976 3,160 1,680 1,110 339 252 1,161 1,093 96,886 1977 3,150 1,590 1,040 365 257 1,371 1,181 107,836 1978 3,090 1,570 1,030 312 262 1,402 1,226 118,612 1979 3,151 1,500 993 314 272 1,462 1,270 129,568 1980 3,390 1,450 1,140 382 272 1,540 1,372 139,472 NA = Not available. 'Ministry of Agriculture, Forestry, and Fisheries, The Meat Statistics of Japan, Jan. 1981. 'Office of the Prime Minister, Monthly Statistics of Japan, various issues. Table 6— Average percentage change in retail prices of livestock products and fish, Japan Item 1960-65 1965-70 1970-75 1975-80 1978 1979 1980 1960-79 Percent Percent per year Yen/kg - per year Beef and veal 9.2 9.9 14.6 4.6 3,090 3,151 3,390 9.6 Pork 3.0 4.1 11.3 - 1.3 1,570 1,500 1,450 4.6 Chicken 8.3 1.3 5.4 2.7 1,030 993 1,140 3.9 Eggs - .2 4.0 6.6 .8 312 314 382 2.0 Fluid milk 7.0 4.6 11.5 3.1 262 272 272 6.9 Fresh fish and shellfish 13.0 12.2 15.6 9.0 1,402 1,462 1,540 12.8 1972 = 1,000 yen Consumer Price Index 6.0 5.4 11.5 6.5 1,226 1,270 1,372 7.3 Based on table 5. 5 Japan’s Feed-Livestock Economy High prices have limited consumption of many livestock products. Japanese food prices are generally much high- er than those in other countries, even for rice, Japan’s principal staple. The prices of eggs and some dairy prod- ucts appear to be in line with those in other developed countries; but Japanese meat prices, depending on the type and cut, are two to five times as high as comparable U.S. prices (46, June 1980, June 1981). Changes in the prices of substitutes have affected con- sumption patterns. For example, the prices of fruit juices and other competing beverages have fallen somewhat fast- er than milk prices, leading to slightly faster growth in consumption of these beverages (12, pp. 103, 104). Marga- rine began to substitute for butter in the seventies be- cause of its spreadability, health considerations, and changes in relative prices (12, 7, pp. 106). Rapidly rising fish prices probably led to increased con- sumption of some livestock products, although the sta- tistical evidence for this is not clear. The elasticity of de- mand for livestock products with respect to the price of fish seems to be weak or not significant. Kester found the relationships between fish and beef and fish and chicken to be about 0.22 and 0.15, respectively (30). Sawada's estimates of cross-elasticities of demand for pork and chicken with respect to fish prices were 0.4 and 0.3. (24, pp. 346, 347). Part of the problem in finding a stronger cross-price relationship between livestock products and fish lies in the definition of fish. In Japan, fish represents a great variety of products, ranging from cheap to expen- sive. Substitution probably occurs not only among fish products but between various fish products and similarly priced livestock products. The primary shifts are probably between fresh fish and either poultry or pork, since these products on average are rather close in price. Substitu- tion of beef for higher grades of fish, like tuna, is also probable, while meat sausage, pressed ham, and eggs substitute for less expensive fish and fish products (9). Noneconomic factors, like cultural values and changes associated with urbanization and economic development, have also influenced the Japanese diet. Separating eco- nomic from noneconomic phenomena is often impracti- cal: cultural and religious values, for example, often underlie governmental policies that directly affect com- modity prices, incomes, and income distribution. Increased consumption of livestock products is often as- sociated with westernization, which has been resisted be- cause of various historical and cultural factors. Bud- dhism is one such factor, whose influence imparted a feeling that went beyond the religious: Abstinence from meat was firmly rooted in both ritu- alistic tradition and innate revulsion . . . Indeed, dur- ing the long period of Japan’s seclusion (beginning with the Nara period of 710-784), meat was thought unfit for human consumption. Buddhist injunctions against eating meat had been challenged with little success by Christian missionaries, and although game and fowl were abundant in earlier times, they were forever left in peace. What probably also tilted Japanese taste toward a vegetarian diet is the fact that eating animal fat produces butyric acid which gives the carnivore a disagreeable smell. (41) Somewhat conflicting information with respect to con- sumption of fowl comes from Tezuka who writes that, although cows and horses were taboo as food because they were used in cultivating the soil . . . the roasting of fowl as in maruyaki and on skewers as in kushiyaki apparently began during the Third Shogun of the Muromachi Period (1332-1568). (44, pp. 12, 16) An increasing preference for Western food is reflected in the growing number of fast food restaurants in Japan. Although meat consumption quadrupled from 1960-80, it was still low: 25 kg per person compared with about 114 kg per person in the United States. 6 Livestock Throughout its history, Japan has “pursued a policy of either enthusiastically accepting ideas from the outside world or shutting the world out entirely for centuries at a time” (43). Brief exposure to Portuguese traders in the 16th century elicited strong Japanese reaction to the “pale, long-nosed, meat-gobbling foreigners” (43, pp. 19). It was not until the Meiji restoration (1868) that a period of increased exposure to the West began. It began slowly. As “new dietary ideas took hold and most of the people gradually abandoned Buddhist regulations forbidding meat consumption, chicken, pork, and beef appeared more frequently” (43, pp. 22). The long tradition of vegetarianism and the once religious taboo against meat consumption undoubtedly continue to have some effect on modern Japan. Although one could argue that low levels of meat consumption today re- sult from economic phenomena, mainly high prices, the high prices are largely a function of governmental pol- icies that perhaps reflect a general feeling that high levels of meat consumption are not that essential. The Japanese now accept their diet as adequate, healthful, and distinct from that of the West. At 2,500 calories per day, the Japanese diet is well below the caloric intake of other developed countries, but more than sufficient to meet human requirements. The Government does not seem to be motivated to raise caloric intake or to alter the composition of the diet (14). Further indication of a residual prejudice against meat consumption is the negative attitude of the Japanese to- ward the burakumin (or eta), a group of people that represents about 2 percent of Japan’s population. This group, one of the few minority groups in an otherwise homogeneous population, is distinguished only by its “association with leather work or butchery. Most Jap- anese are loath to have contact with them and are careful to check family records to insure that they avoid inter- marriage” (40, pp. 36). The dietary pattern in Japan has also been affected by factors associated with increased trade and contact with the West, urbanization, and the expanding importance and influence of the media. Although Japan opened itself up to the West in the mid-19th century, only after World War II did contact with the West become pervasive, when Japan was administered by Allied occupation forces dur- ing 1945-52. In 1946, a new national school lunch program was initiated, featuring such nontraditional foods as dairy products and bread. Migration to urban areas, increased exposure to electronic media, and the country’s aggres- sive trading all contributed to broader contact with the West and its dietary pattern. Japan’s Livestock Economy Japan’s livestock production has expanded in response to growing consumer demand for meat, eggs, and dairy products (table 7). The Government has had a major role in shaping the country’s livestock industry through pro- tective policies implemented since the passage of the Basic Agricultural Law (127) in 1961 (table 8). The law pro- vides for “selective expansion of agricultural production by increased production of products in growing demand, by diversion of production from products in decreasing demand, by rationalizing production of products which compete with foreign agricultural products.” Livestock products were among those products in growing demand. The Law for Price Stabilization of Livestock Products, also enacted in 1961, provided the legal and admin- istrative machinery to carry out the broader intent of the Basic Law. The Livestock Industry Promotion Corpora- tion (LI PC), a public corporation modeled after earlier in- stitutions designed to stabilize dairy prices, was set up to stabilize prices for livestock products in general (32). Some programs involved the Corporation's direct involve- ment in procuring, storing, and selling designated live- stock products (of either domestic or foreign origin) in order to maintain wholesale prices within a predeter- mined range. Other programs to promote the livestock in- dustry have included storage subsidies and loan guaran- tees to producer groups, school lunch subsidies, and market promotion activities. The Livestock Industry Pro- motion Council, consisting of up to 25 members, was in- Table 7— Growth in Japan’s livestock production Item 1960-65 1965-70 1970-75 1975-79 1960-79 Percent per year Beef and veal 6.1 6.9 4.3 5.2 5.6 Pork 20.9 12.4 5.2 13.2 12.8 Chicken 36.0 19.8 8.4 9.6 18.4 Eggs 13.3 11.5 .5 2.5 7.0 Milk 11.0 7.9 .9 6.6 6.5 All livestock products 14.2 9.4 4.4 6.4 8.7 Fish 2.3 6.2 2.4 .2 2.9 Sources: Ministry of Agriculture, Forestry, and Fisheries, Statistical Yearbook, various issues; U.S. Dept. of Agriculture, Economic Research Service, World Indices of Agricultural and Food Production, SB-699, July 1981. This section would not have been possible without the assistance of Lois Caplan. She researched and drafted sections on the beef and poultry industries and developed many of the supporting tables. 7 William T. Coyle stituted to advise the Minister of Agriculture on such pro- blems as upgrading domestic breeds, improving livestock management, and stabilizing livestock and feed prices (32). The Basic Agricultural Law and the Law for Price Stabili- zation of Livestock Products created the policy environ- ment for livestock producers. Although the LIPC touched all livestock activities in one way or another initially, it emphasized dairy and pork operations and practically ig- nored the poultry industry (broilers and eggs; 34, p. 28). Starting in 1965, the LIPC influenced beef prices some- what by importing and selling foreign beef (34, p. 30). This influence became stronger as beef producers became more closely tied to the dairy sector. In the early sev- enties, beef fatteners experienced a severe cost-price squeeze that motivated policymakers to develop pro- grams that handled beef in much the same way as dairy Table 8— Japanese policies affecting its livestock sector Type of policy Dairy Beef Pork Eggs Chicken Price Deficiency payments paid to producer to guarantee price for manufactured milk Limit on amount of manufactured milk eligible for support Wholesale price es- tablished for desig- nated dairy products Wholesale floor and ceiling prices are es- tablished for Wagyu and dairy steer beef. Wholesale floor and ceiling prices are established Government partici- pates in egg price stabilization fund Production adjust- ment by tying pro- ducer behavior to eli- gibility for compen- satory payments Private price stabili- zation fund Stockholding LIPC buys, holds, and sells designated dairy products to keep market price within predeter- mined floor and ceil- ing prices LIPC purchases and releases beef to the market LIPC buys domestic pork at the floor price and sells it at the ceiling price Administrative guidance’ Government partici- pation in National Fluid Egg Manufac- turer and Stockpiling Company Administrative guidance’ Imports Quotas set for —evaporated and condensed milk — powdered milk — whey —butter —processed cheese — lactose —other Tariff quota on natural cheese Tariffs, 25 to 35 percent Semiannual quota set for beef. Most of trade controlled by LIPC through licens- ing system Tariff— 25 percent for beef Tariff on beef offals will be reduced from 25 percent to 15 per- cent by 1987 Surcharges Trade controlled by private trade Variable levy system restricts imports; system is waived from time to time Tariff— 10 percent, scheduled to decline to 5 percent by 1987 Administrative guidance' Tariffs— 20 percent for some products and 25 percent or 60 yen per kg for others Tariff— 20 percent; tariff on chicken legs will be reduced to 10 percent by 1987 Administrative guidance’ Subsidies Various subsidies paid to promote con- sumption of dairy products and to en- Feeder calf and feed prices are subsidiz- ed through price stabilization funds Some producers subscribe to a Government-supported feed price stabilization scheme courage dairy pro- duction (lower input costs) ’Administrative guidance (gyoseishido) consists of recommendations, advice, or directions issued by a Japanese Government agency and is void of coercive legal power. 8 Livestock products and pork (34, p. 30). On the other hand, egg and chicken meat production, closely interrelated industries, evolved quickly into discrete specialized activities requir- ing little or no governmental interference. The characteristics of a livestock industry and of Japan’s natural resources greatly influence the industry’s need for government protection. A severe land constraint, ex- acerbated by governmental policies (the Land Law of 1952, for example, which keeps farm sizes very small and the rice policy, which channels resources into rice pro- duction), has made it difficult for dairy and beef pro- ducers to make their operations more efficient to the same extent as poultry and pork producers. Pork and poultry operations are characterized by intensive use of land through confined feeding techniques and almost complete reliance on commercially purchased feed con- centrates (made mostly from imported grains and oil- seeds). Poultry production has been possible with border protection limited to relatively low tariffs on chicken im- ports (20 percent or less), compared with those on beef (25 percent) and dairy products (25-35 percent). The volume of beef and dairy imports is restricted, whereas poultry imports are not. The LI PC is most heavily involved in stabilizing prices of beef and dairy products. Pork im- ports are somewhat restrained with a variable levy system that is waived from time to time. Pork is not protected by Table 9— Japanese wholesale prices compared with import prices, selected livestock products Year Beef' Pork' Chicken’ Eggs2 Nonfat dry milk3 Butter3 Percent of import price 1960-65 253 222 135 NA NA NA 1965-70 333 160 128 123 423 244 1970-75 344 139 131 108 290 233 1975-79 545 124 129 96 455 323 Note: Differences in quality are not taken into account in com- paring domestic prices with import prices. Import prices include transportation and insurance costs. NA = Not available. 'Wholesale prices divided by import unit values. Import values converted to carcass basis using 0.7 for beef and pork and 0.72 for chicken. 2Tokyo wholesale prices for fresh eggs, divided by import unit values for egg products (powdered eggs and egg yolks). 3Stabilization indicative prices divided by import unit values. Sources: Ministry of Finance, Japan Exports and Imports, various issues; Office of the Prime Minister, Japan Statistical Yearbook, various issues; Ministry of Agriculture, Forestry, and Fisheries, The Meat Statistics of Japan, Jan. 1981. an import quota system, and private traders, not the LIPC, manage the trade. Sectoral characteristics and Government policy have af- fected the economic performance of each industry. High and rising nominal rates of protection (wholesale prices compared with import prices) for beef and dairy products have assured profitability and reduced the tempo of ad- justment and structural change. Relatively lower and de- clining rates for pork, chicken, and eggs have led to rapid structural change (table 9). Producer prices for beef and milk have risen more rapidly than those for products more subject to free market forces (table 10). The product-feed price ratios for beef and milk have increased rapidly since 1960. On the other hand, the product-feed price ratios for chicken and eggs have declined, leading to rapid modernization and growth in the scale of operations in these increasingly com- petitive sectors (table 11). Average firm size of egg, broiler, and pork producers (measured by the number of animals) has grown much more quickly than that of dairy and beef producers (table 12). The rapid decline in the number of beef producers has not led to significant con- solidation and expansion of individual herds. Although there are more feedlot operations, the average Japanese beef herd today has only five or six animals. Japan’s greater efficiency in pork and poultry production has led to less dependence on trade. During 1960-79, Ja- pan imported less than 5 percent of its eggs and chicken requirements and about 10 percent of its pork require- ments. Beef imports, on the other hand, rose constantly. Table 10— Changes in livestock product prices, Japan Item 1960-65 1965-70 1970-75 1975-79 1960-79 Percent per year Livestock products 3.8 2.8 14.4 1.4 5.7 Beef and veal 9.4 9.2 15.1 3.7 9.6 Pork .9 1.9 15.7 -6.4 3.2 Chicken 5.2 -.6 8.7 -4.6 2.4 Eggs NA 0 9.5 -4.9 1.1 Milk 8.1 5.6 14.0 2.4 7.7 All agricultural products 8.3 5.5 12.6 4.2 7.8 Rice 9.1 4.9 13.4 3.4 7.9 NA = Not available. Source: Ministry of Agriculture, Forestry, and Fisheries, Statistical Yearbook, various issues. 9 Japan’s Feed-Livestock Economy An average of 3 percent of total beef consumption was imported in 1960-65, compared with 27 percent in 1975-79. Imports of dairy products (milk equivalent) averaged about 15 percent, with some decline in recent years due to slower growth in consumption. Livestock production in Japan has become increasingly important to the agricultural economy, rising from 15 per- cent of gross agricultural income in 1960 to 26 percent in 1979. At the same time, rice production has become less important, falling from 49 percent in 1960 to 34 percent in 1979. Among livestock activities, dairy and hog produc- tion are presently the biggest gross income earners. Egg production, the most important during the sixties, is now third, followed by beef and chicken. Broiler producers have the largest gross income per farm and beef pro- ducers the smallest. U.S. efforts in recent years to expand trade in high-quality beef have elicited strong opposition from Japanese pro- ducers. Even though Japanese beef production is gener- ally a sideline activity accounting for relatively little farm income, beef producers have succeeded in obtaining sub- stantial Government support, particularly in the last 10 years. Their success is probably attributable to the large number of producers and to the industry’s increasingly close ties with the highly protected dairy industry. Japan had 340,200 beef producers in 1982— more than any other livestock activity in the country. Liberalization in beef trade would hurt not only beef producers but also the 98,900 dairy farmers who earn 10-20 percent of their in- come from the sale of culls and steers for beef production. The following sections look more closely at the structural characteristics and policies affecting each of the five principal livestock activities. Table 11— Changes in product-feed price relationships, Japan Item 1960-65 1965-70 1970-75 1975-79 1960-79 Percent per year Livestock products 1.3 1.7 2.6 3.1 2.1 Beef and veal NA 5.4 2.9 5.8 4.6 Pork 3.6 -.7 2.6 -4.9 .2 Chicken NA -2.6 -3.0 -2.9 - 1.0 Eggs NA - .9 - 1.9 -4.0 -2.9 Milk 3.9 4.2 -2.4 3.6 3.5 NA = Not available. Source: Ministry of Agriculture, Forestry, and Fisheries, Statistical Yearbook, various issues. Beef Sector The Buddhist taboo against eating meat made killing a cow for food unthinkable (41, p. 190). When Commodore Matthew Perry arrived in 1853 and the first U.S. Consul General, Townsend Harris, in 1856, there was “not a sheep or goat in all Nippon, and the few bullocks that were kept were used for burden or the plough only; they were never eaten” (34, p. 194). When Harris first con- sumed beef is not known but a monument in Shimoda in- dicates the spot on which the first cow was slaughtered for human consumption. About 15 years later, the Em- peror tasted beef for the first time, after which the people slowly began to accept it as food (41, p. 195). In the early years, beef came mainly from slaughtered draft animals and culled dairy animals. Not until after World War II were beef animals raised specifically for eating. Structural Characteristics. Twenty years ago, most do- mestic Japanese beef came from the native Wagyu breed, an animal that had been used primarily for draft purposes before being replaced by tractors in the fifties. The large inventory of this breed assured an adequate supply of feeder stock for fattening and eventual slaughter. Its de- clining role as a work animal, however, led to a reduction in total inventory from 2.34 million in 1960 to 1.55 million in 1967. In the midsixties, governmental policies arrested the decline and encouraged a return to larger Wagyu herds. By 1980, Wagyu numbers had increased but total inventory was still below its 1960 level. Typically Wagyu are raised as a sideline to other agricul- tural activities. Average herd size is still very small but has grown from about 1.3 animals during 1960-65 to 4.7 during 1975-79. With the rise in average herd size, the number of beef farms fell from 2 million in 1960 to about Table 12— Average herd or flock size for principal Japanese lifestock enterprises Item 1960-65 1965-70 1970-75 1975-79 1979 Animals per farm Beef and veal cattle 1.3 1.6 2.9 4.7 5.5 Swine 4.0 9.7 23.3 46.4 60.7 Broilers NA 1,852.8 5,101.0 10,081.0 12,684.0 Layers 25.9 62.2 186.6 492.1 670.3 Dairy cattle 2.6 4.4 8.2 13.9 16.8 NA = Not available. Source: Ministry of Agriculture, Forestry, and Fisheries, Statistical Yearbook, various issues. 10 Beef 340,200 in 1982. There was also a general trend toward greater specialization, with Wagyu calves sold at 8-10 months to feedlots for fattening. Shortage of pasture lands and limited production of for- age and grains have caused most beef producers to rely on commercially purchased feed concentrates, most of which are imported. Average annual consumption of for- mula feed per beef animal was 230 kilograms in 1965-70. By 1975-80 the average had jumped to 1,088 kilograms, and fulfilled about half of the nutritional requirements of an adult beef animal. Increased use of concentrates and confinement feeding have raised the average slaughter weight from 217 kg in 1960-64 to 334 kg in 1975-79. The cost of raising beef in Japan depends on whether the producer breeds and raises calves or fattens and finishes older animals (feedlot operators). Some producers do both. Breeding and raising operations have higher labor costs. But feed costs are lower, since a large proportion of grain, pasture, or other forage crops is produced on the farm. Fattening operations are land intensive and spend more on feed. The cost of feeder stock is usually the largest expense. The Government has pursued policies designed to main- tain beef producers’ income as well as to enhance the country’s self-sufficiency in beef. Despite prices that The Wagyu is the predominant beef breed raised in Japan. Most Japanese beef production, however, now comes from dairy cattle. have been three to four times the world level in recent years, the self-sufficiency ratio slipped from an average of 96 percent in 1960-65 to 73 percent in 1975-79 (tables 13 and 14). Efforts to expand production in line with con- sumers’ needs have been constrained by limited pasture area and forage production. The reduction in the size of the Wagyu herd during the sixties and the slower growth of the dairy herd in the seventies also limited the number of calves available for fattening. The dairy herd provides about 60 to 70 percent of the beef produced in Japan, either as fattened dairy steers or as older culled cows. Dairy steers were an increasingly important source of beef through the midseventies and then leveled off toward the end of the decade at about 30 percent of total supplies. Culled dairy cows have also pro- vided about 30 percent of the domestic beef supply in recent years. Despite the importance of dairy animals in total beef pro- duction, Japanese dairy farmers receive only 10-20 per- cent of their gross agricultural income from the sale of calves and culls. Dairy producers, therefore, are more in- terested in the profitability of milk production. At the margin, however, relative prices of milk and beef affect decisions about culling cows and selling calves. Government Policies. The objectives of Japan’s beef pol- icy are to maintain producer income and to improve the country’s self-sufficiency in beef (currently 73 per- cent—see table 49 for projections). To keep producer prices of beef at a level that assures a reasonable return, the Government has administered prices through import controls and stock adjustments. Similarly, the Govern- ment has implemented programs to stabilize the prices of important inputs such as feed and feeder animals. Import controls on beef were first imposed in the late fif- ties in order to reduce the drain of scarce foreign ex- change. Traders were required to have a special license and a foreign exchange allocation to import beef. In April 1964, beef became subject to import quota restrictions. The Livestock Industry Promotion Corporation (LIPC), which was created to carry out the Law for Price Stabiliza- tion of Livestock Products (1961), was empowered in 1964 “to stabilize the domestic market for beef.” Between 1965 and 1971 the LIPC and private traders were allocated the beef import quota, with the LIPC controlling a growing percentage of the total. Additional firms were given licenses in ensuing years but the number has remained small. The LIPC controls about 90 percent of the quota now. MAFF adjusts the size of the quota on a semiannual basis with the goal of stabilizing prices on the Japanese market. The quota has varied from as much as 160,000 tons in Japan fiscal year (JFY) 1973 to zero in JFY 1974 (tables 15 and 16). 11 William T. Coyle An unusual sight in Japan — a large herd of Hereford cat- The typical beef herd in Japan has 5 to 6 animals, com- tie at an experimental farm outside of Obihiro, Hokkaido. pared with about 50 in the average U.S. beef herd. Table 13— Japan’s supply and distribution of beef Japan fiscal year Domestic production Imports Exports Change in stocks Supplies for domestic consumption Waste Domestic utilization Gross food Ratio Net food Annual per capita consumption 1,000 metric tons Percent 1,000 metric tons Kilograms 1960 141 6 147 3 144 77 111 1.2 1961 141 6 — — 147 3 144 77 111 1.2 1962 153 4 — — 157 3 154 77 119 1.3 1963 198 5 — — 203 4 199 77 153 1.6 1964 229 6 — — 235 5 230 77 177 1.8 1965 190 11 201 4 197 77 152 1.5 1966 152 14 — — 166 3 163 77 126 1.3 1967 148 16 — — 164 3 161 77 124 1.2 1968 172 15 — — 187 4 183 77 141 1.4 1969 230 18 — — 248 5 243 77 187 1.8 1970 265 33 298 6 292 72 210 2.0 1971 279 62 — — 341 7 334 72 240 2.3 1972 290 73 — — 363 7 356 72 256 2.4 1973 215 170 — 28 357 7 350 72 252 2.3 1974 326 40 — - 18 384 8 376 72 271 2.5 1975 327 91 11 407 8 399 70 279 2.5 1976 309 134 — -7 450 9 441 70 309 2.7 1977 371 132 — 6 497 10 487 70 341 3.0 1978 406 146 — -3 555 11 544 70 381 3.3 1979 400 189 — 5 584 12 572 70 400 3.4 1980 431 172 — 6 597 12 585 70 410 3.5 — = None or negligible. Source: Ministry of Agriculture, Forestry, and Fisheries, Statistical Yearbook, annual issues. 12 Beef Various innovations have been made over the years to make the import quota system more flexible. The “one- touch” system (1970) allows authorized importers to sell LIPC quota beef directly to authorized distributors in order to reduce the handling of chilled beef, a very per- ishable commodity (22, p. 6). The “tender” system (1971) was introduced to insure that the quality and quantity of frozen imported beef would match domestic demand. The LIPC periodically issues tenders to importers, specifying quality, quantity, and de- livery time for different lots of beef and then purchases from the lowest bidders. The beef is then sold to end users by auction at wholesale markets or to specified or- ganizations at a fixed price (22, p. 6). Japan imposes a 25-percent ad valorem tariff on all im- ported beef.5 Various surcharges are also levied to reduce the disparity between the prices of imported and domes- tic beef. These revenues are used to support and promote the livestock industry. Live animals, both feeder and slaughter cattle, do not come under the import quota system but rather a tariff quota system.6 To the extent that live cattle are imported for slaughter, the effectiveness of other import restric- tions is diminished. 5The tariff on beef offals will be cut from 25 percent to 15 per- cent by 1987 as a result of an agreement reached at the Tokyo round of multilateral trade negotiations. 6Tariff quotas are applied to 11 agricultural items. Quotas are set periodically, generally twice a year. Imports that exceed quota levels are subject to a more restrictive tariff policy. Table 14— Beef prices, Japan A B C D E F G Wholesale price Japan fiscal year Import unit value From the For all beef United States Exchange rate Import price A x C 1,000 Producer price Wholesale, carcass price Retail price compared with the import price — xlOO D Dot. per metric ton Yen per dot. Yen per kilogram Percent 1960 555 — 360 200 178 287 549 144 1961 569 — 360 205 194 337 637 164 1962 529 — 360 190 203 342 702 180 1963 504 — 360 181 202 345 748 191 1964 592 — 360 213 213 347 804 163 1965 640 360 230 279 510 854 222 1966 782 — 360 282 339 605 1,050 215 1967 984 — 360 354 388 762 1,240 215 1968 971 — 360 350 407 825 1,420 236 1969 847 — 360 305 393 813 1,350 267 1970 960 360 346 433 843 1,370 244 1971 1,112 2,536 351 390 466 860 1,470 221 1972 1,378 3,518 303 418 533 930 1,510 222 1973 2,249 3,375 271 609 811 1,419 1,980 233 1974 2,514 3,339 292 734 749 1,445 2,450 197 1975 1,678 4,463 297 498 866 1,640 2,710 329 1976 1,734 3,167 297 515 963 1,986 3,160 386 1977 1,588 3,000 271 430 953 2,007 3,150 467 1978 2,168 3,538 210 455 980 1,938 3,090 426 1979 3,129 3,880 219 685 1,150 2,056 3,150 300 1980 3,581 4,773 227 811 1,143 2,161 3,390 266 1981 3,245 4,108 221 717 1,097 2,142 3,360 299 — = None or negligible. Sources: Ministry of Finance, Japan Exports and Imports, annual issues; Ministry of Agriculture, Forestry, and Fisheries, The Meat Statistics of Japan, June 1981. 13 Japan’s Feed-Livestock Economy The LIPC influences domestic beef prices by adjusting stocks and through the semiannual adjustment in the im- port quota. A price stabilization scheme for beef was in- stituted in May 1975, giving the LIPC authority to main- tain wholesale prices of second-grade Wagyu and dairy steer beef at predetermined levels. The midpoint for sec- ond-grade Wagyu beef is based on a calculation that con- siders average farm and wholesale prices over the prior 7-year period as well as the current costs of fattening such an animal. Floor and ceiling prices are calculated on the basis of historical price variation. Floor and ceiling prices for dairy steer beef are about 80 percent of the cor- responding Wagyu prices (35, pp. 168-172). The Government has also been involved in stabilizing the price of feed, an increasingly important input in beef pro- duction and other livestock enterprises, by stockpiling feed grains and establishing a feed price stabilization fund. These policies are described in the section on feed supply. During the sixties, to help slow the general decline in Wagyu numbers, feeder calf support prices were intro- duced to insulate the feeder calf market from downward swings in the wholesale beef market. When feeder calf prices fall below a predetermined level, producers’ re- turns are supplemented from a stabilization fund that is supported by producers, the Prefectural (state) Govern- ment, and the national Government. Reserve and contin- gency funds are also available if the basic fund is de- pleted. About 40 percent of the LIPC budget is used for this program (33). The Government is also involved in other activities that affect the profitability of beef production. Most of these are related to reducing the effective cost of inputs or to streamlining the marketing system. For example, the Government provides subsidies for the enlargement and improvement of pasture. Efforts to enlarge pasture area include increasing the area planted to grasses and for- ages, especially in upland areas, and developing public lands for pasture. Subsidies are currently paid for double- Table 15 — lapan’s beef import quotas Japan fiscal year Total' General Hotel School lunch Okinawa Boiled and canned beef 1960 4,200 Metric tons 1961 3,000 — — — — — 1962 3,000 — — — — — 1963 5,000 — — — — — 1964 3,000 — — — — — 1965 10,100 1966 8,500 8,500 — — — — 1967 19,000 15,100 — — — 3,900 1968 21,440 15,340 — — — 6,100 1969 28,200 24,000 500 — — 3,700 1970 24,700 20,530 500 3,630 1971 36,500 31,800 500 — — 4,200 1972 77,830 67,300 1,000 — 4,330 5,200 1973 160,000 155,800 — — — 4,200 1974' 1 1 1 1 1 1 1975 84,430 73,470 1,000 1,000 4,930 4,030 1976 96,500 80,000 1,000 3,000 5,500 7,000 1977 92,500 80,000 2,000 2,200 5,300 3,000 1978 112,000 95,000 3,000 3,000 5,600 5,400 1979 134,500 116,500 3,000 2,500 5,800 6,700 1980 134,800 119,000 3,000 2,250 5,850 4,700 1981 126,800 111,000 3,000 2,250 5,850 4,700 — = None or negligible. 'Quotas were suspended between February 1974 and January 1975. Sources: U.S. Dept, of Agriculture, Foreign Agriculture Service. 14 Dairy cropping hay and fodder crops on rice paddy land. The production of forage crops has also been encouraged under the riceland diversion programs of the seventies and eighties. The Government promotes modernization of the do- mestic beef industry by providing low-interest loans for purchasing machinery and livestock, and for improving in- stallations such as livestock sheds. Subsidies are pro- vided to develop large-scale feedlot operations. The Gov- ernment encourages cooperative ventures that are better able to take advantage of economies of scale by sharing equipment and machinery. The Regional Agricultural Production Integration Pro- gram organizes regionally integrated production units that make joint use of facilities and are large enough to use large-scale production techniques. These units are closely linked with regional marketing systems. Expansion of farm holdings has been promoted through legislation, including revisions in the Land Law that allow farmers to expand their land base by relaxing limits on farm size, and by low-interest loans, which are available for consolidation of land and for the acquisition of land by cooperatives (4, pp. 23-26). These programs have had very little effect on average farm size. Dairy Sector Japan’s dairy industry is relatively new. Milk cattle were introduced during the Tokugawa Shogunate (1603-1867), probably by the Dutch. “White” cattle of a milking breed were reportedly kept and bred 50 miles from Yedo (now Tokyo) around the 1730’s. At that time, the milk was evap- orated and used as a drug in treating tuberculosis and syphilis (48, p. 15). The first American Consul, Townsend Harris, was offered locally produced cow’s milk in 1857 and the first dairy farm was probably established in the early 1860’s near the port of Yokohama. Demand for milk in the early days of the Meiji Restoration (1868-1912) came mainly from American and European traders staying at Japanese seaports. In response, dairy production devel- oped in close proximity to these ports (39, p. 567). Milk and dairy products did not enter the daily diet of Jap- anese people until well into the 20th century, partly be- cause of the Buddhist aversion to consuming livestock products. During the early 20th century, milking herds were kept mainly in suburban areas, and were fed brewery residues, brans, beet pulp, and some feed mixtures. Ranches in frontier areas like Tohoku and Hokkaido raised and sup- plied milk cows which were bought in late pregnancy. Their offspring were either slaughtered for veal or sent back as early as possible to rural areas where they were pastured (48, p. 16). It was not until around World War | that the technology of processing dairy products allowed dairies to develop and prosper in the more remote areas. Hokkaido and Tohoku are today among the most sparsely populated regions— yet they account for almost 50 per- cent of Japan’s dairy herd and provide about 70 percent of the country’s pasture and forage area. Most of Hokkaido’s current milk production is for processing. Structural Characteristics. Japan’s dairy herd, mostly Holstein animals, has expanded steadily, with the excep- tion of a decline between 1971 and 1974. While average herd size increased from 3.3 animals in the sixties to 10.8 in the seventies, the number of dairy farms dwindled from 410,000 in 1960 to 105,800 in 1981 (table 17). Table 16— Japanese imports of beef and veal Calendar year Total United States Australia New Zealand Ryukyu Islands 1,000 metric tons 1960 6 3 3 1961 5 — 3 3 — 1962 5 — 3 2 — 1963 5 — 3 1 — 1964 6 — 5 1 — 1965 11 8 3 1966 13 — 9 3 1 1967 14 — 10 2 1 1968 14 — 10 2 1 1969 19 — 15 3 — 1970 23 20 3 1971 42 1 37 4 — 1972 58 1 53 4 1 1973 127 10 107 9 1 1974 54 8 42 3 1 1975 45 4 37 4 1 1976 94 12 77 5 1 1977 85 7 72 4 1 1978 101 13 78 8 1 1979 130 24 100 3 1 1980 122 22 93 4 1981 122 26 87 6 1 — = None or negligible. 'Not applicable. Ryukyus (Okinawa) became a part of Japan in 1972. Source: Ministry of Finance, Japan Exports and Imports, various issues. 15 William T. Coyle Dairy bull calves are usually sold at a few days of age to feedlots where they are raised and fattened to slaughter weight (325-350 kg) in 18 months. Some dairies raise steers until they are 6 to 12 months of age before selling. Heifers are occasionally raised and fattened for beef, de- pending on the demand for replacement cows. Culled cows are often put on grain for a few months before slaughter. Milk production per cow increased over the past two de- cades with improved management and increased use of concentrates. Annual yields per dairy cow rose from 5.3 tons in 1965-69 to 5.8 tons in 1975-79 (table 17). Formula feed consumed per animal rose from 530 kg per year in 1960-65 to 1,101 kg in 1975-80. Feed and labor costs represent about 80 percent of the total cost of milk production. About 60 percent of the total is for feed with more than half purchased commercially and the rest produced on the farm. In northern Japan, where land is cheaper, commercially purchased feed is less im- portant. Large cooperative grazing farms are used. Such farms receive young heifers from local farmers, raise and breed them, and then return them to their owners. The cattle are pastured on hilly lands for a daily rate during the summer months. Rates are higher in the winter when the animals are confined and fed silage and hay. Government Policies. The goals of Japan’s dairy policy are to assure an adequate supply of reasonably priced milk and dairy products for consumers, to maintain dairy farmers’ income, and to promote the country’s self-suffi- ciency in dairy products (89 percent in 1978; see table 49 for projections). The country pursues these goals through price, trade, and other policies. The dairy farmer receives a pooled price, which depends on the Prefectural price of fluid milk and the support price of manufactured milk. The price of fluid milk is negoti- ated annually among farmers, dairy cooperatives, and milk companies at the Prefectural level, taking into con- sideration demand factors and intraprefectural competi- tion. A guaranteed price for manufactured milk is set annually by the Government, taking into consideration costs of production, and is substantially lower than the fluid milk price (table 18). Since 1966, special premiums have been paid for high butterfat content. The amount of milk eligible for deficiency payment is limited, but it is not clear how firmly these limits are applied (12, p. 119). The pooled price differs from one Prefecture to another depending on the proportion of milk sold to the fluid mar- ket and for processing. In Prefectures where a relatively large percentage goes to the fluid market, the pooled price is higher. Dairy cooperatives sell milk to processors at a standard transaction price, determined in part by demand for dairy products. This price is lower than the support price, ne- cessitating a Government deficiency payment to make up the difference. Processors sell designated products such as butter, powdered products, and condensed milk at sta- bilization indicative prices, which are adjusted peri- odically to reflect changes in demand and processing costs. The Livestock Industry Promotion Council, through import quotas and stock adjustments, maintains the wholesale price between 90 and 104 percent of the stabilization indicative prices for each product. The domestic dairy price depends on regulation of trade in most dairy products. The drinking milk market is natu- rally protected by location and the perishability of milk. Manufactured dairy products, which are more easily trans- ported and stored, are strictly protected since world prices are much lower than domestic Japanese prices (tables 19 and 20). About one-third of Japan’s domestic beef supply comes from fattened dairy steers. Imports of dairy products are limited by quotas and tar- iffs. Import quotas, which are adjusted semiannually, lim- 16 Dairy it imports of evaporated and condensed milk, powdered milk, whey, butter, processed cheese, lactose, and mis- cellaneous preparations containing mainly milk, like in- fant formula. A tariff quota allows duty-free imports of natural cheese not to exceed twice the level of domestic production. The purpose is to encourage the production of processed cheese using a blend of domestic and im- ported material that will be competitive with imported processed cheese that enters with a 35-percent tariff. Ad valorem tariffs, ranging from 25-35 percent, are ap- plied to most dairy product imports. Casein is the only product that is imported without restriction. Other policies are generally consistent with the overall goals of the country's dairy policy. Incentives have been extended from time to time to encourage the upgrading of the dairy herd by importing breeding stock. Under surplus conditions (as in recent years), the Government paid in- centives to farmers to cull cows to reduce milk produc- tion. The riceland diversion program has given some farmers the opportunity to shift land from rice to feed crops, which has been an effective feed subsidy for some dairy farmers. The LIPC, along with dairy associations and milk product makers, is subsidizing construction of a natural cheese plant in Hokkaido that will increase Japan’s present 10,000-ton capacity by about 25 percent and reduce the market for imports (45, vii). Table 17— Milk production, Japan Number of cows that Raw milk production Annual Total have calved Average milk Dairy dairy and are herd production Year farms cows in milk size Total Fresh Processed per cow Number 1,000 head Head - 1,000 metric tons Metric tons 1960 410,420 824 NA 2.0 1,887 987 742 NA 1961 413,000 885 NA 2.1 2,114 1,105 845 NA 1962 415,710 1,002 NA 2.4 2,437 1,188 1,067 NA 1963 417,640 1,145 NA 2.7 2,761 1,397 1,173 NA 1964 402,470 1,238 NA 3.1 3,020 1,644 1,181 NA 1965 381,600 1,289 634 3.4 3,221 1,771 1,259 5.1 1966 360,660 1,310 665 3.6 3,409 1,974 1,248 5.1 1967 346,900 1,376 692 4.0 3,566 2,120 1,265 5.2 1968 336,700 1,489 735 4.4 4,016 2,323 1,505 5.5 1969 324,440 1,663 816 5.1 4,509 2,482 1,835 5.5 1970 307,600 1,804 885 5.9 4,761 2,623 1,962 5.4 1971 279,300 1,856 912 6.6 4,820 2,664 1,997 5.3 1972 242,900 1,819 918 7.5 4,939 2,803 1,988 5.4 1973 212,300 1,780 909 8.4 4,908 2,943 1,831 5.4 1974 178,600 1,752 900 9.8 4,868 2,976 1,766 5.4 1975 160,100 1,787 910 11.2 4,961 3,130 1,713 5.5 1976 147,100 1,811 928 12.3 5,262 3,314 1,830 5.7 1977 136,500 1,888 968 13.8 5,735 3,548 2,067 5.9 1978 129,400 1,979 1,013 15.3 6,117 3,682 2,310 6.0 1979 123,300 2,067 1,072 16.8 6,463 3,857 2,468 6.0 1980 NA NA 1,070 NA 6,502 3,986 2,334 6.1 1981 105,800 2,104 1,075 19.9 6,620 4,126 2,307 6.2 NA = Not available. Source: Ministry of Agriculture, Forestry, and Fisheries, Statistical Yearbook, various issues. 17 Table 18— Dairy prices, Japan Guaranteed Quantity Japan Producer price for Standard eligible for fiscal price of manufactured transaction Deficiency deficiency year milk milk price payment payment Million Yen per kilogram metric Ions 1966 39.20 37.03 31.81 5.22 NA 1967 44.50 39.79 34.79 5.00 NA 1968 46.20 42.52 36.58 5.94 1.071 1969 47.60 43.52 37.03 6.49 1.350 1970 48.30 43.73 37.10 6.63 1.455 1971 51.90 44.48 37.42 7.06 1.554 1972 53.50 45.48 37.78 7.70 1.594 1973 60.50 48.51 40.49 8.02 1.501 1974 81.40 70.02 53.41 16.61 1.380 1975 91.20 80.29 57.57 22.72 1.380 1976 99.70 86.41 62.34 24.07 1.380 1977 101.60 88.87 64.29 24.58 1.580 1978 101.90 88.87 64.30 24.57 1.830 1979 101.30 88.87 64.30 24.57 1.930 1980 100.50 88.87 64.30 24.57 1.930 NA = Not available. Sources: Ministry of Agriculture, Forestry, and Fisheries, Statistical Yearbook, various issues; Livestock Industry Promotion Corpora- tion, LIPC, Feb. 1975; Australian Bureau of Agriculture Economics, Japanese Agricultural Policies: Their Origins, Nature, and Effect on Production and Trade, Canberra, 1981. Table 19— Butter prices, Japan (A) (B) (C) (D) Japan fiscal year Standard transaction price (producer)' Stabilization indicative price (wholesale)2 Retail price (Tokyo)3 Import unit values4 <^x 100 (B) 100 (C) <*>x 100 (D) Yen per kilogram Percent 1966 31.8 573 800 324 5.6 72 177 1967 34.8 612 800 315 5.7 77 194 1968 36.6 647 800 244 5.7 81 265 1969 37.0 647 800 222 5.7 81 291 1970 37.1 647 800 222 5.7 81 291 1971 37.4 647 844 295 5.8 77 219 1972 37.8 647 884 366 5.8 73 177 1973 40.5 698 911 271 5.8 77 258 1974 53.4 914 1,013 384 5.8 90 238 1975 57.6 999 1,262 462 5.8 79 216 1976 62.3 1,160 1,369 410 5.4 85 283 1977 64.3 1,253 1,422 330 5.1 88 380 1978 64.3 1,253 1,524 311 5.1 82 403 1979 64.3 1,253 1,520 378 5.1 82 331 ’The standard transaction price is paid to producers. If this price is lower than the support price, the difference is made up by a defi- ciency payment. 2The indicative price applies to the wholesale price of butter. The LIPC imports or makes adjustments in its stocks of butter to main- tain the wholesale price between 104 and 90 percent of this price. 3Office of the Prime Minister, Monthly Statistics of Japan, various issues. ‘Ministry of Finance, Japan Exports and Imports, annual issues. Price includes commodity, insurance, and freight (c.i.f.). 18 Table 20— Prices of nonfat dry milk, Japan Japan fiscal year (A) (B) (C) Standard transaction price (producer)' Stabilization indicative price (wholesale)2 Retail price (powdered milk) in Tokyo3 (D) Import price4 (A) (B) x 100 — x 100 (C) Mx 100 (D) Yen per kilogram Percent 1965 NA NA 729 76 1966 31.8 338 731 108 9.4 46.2 313 1967 34.8 366 733 119 9.5 49.9 308 1968 36.6 388 653 99 9.4 59.4 320 1969 37.0 388 635 62 9.5 61.1 626 1970 37.1 388 631 71 9.6 61.5 546 1971 37.4 388 711 120 9.6 54.6 323 1972 37.8 388 709 184 9.7 54.7 211 1973 40.5 388 741 146 10.4 52.4 266 1974 53.4 462 840 231 11.6 55.0 200 1975 57.6 462 1,027 241 12.5 45.0 192 1976 62.3 506 1,267 121 12.3 39.9 418 1977 64.3 506 1,200 83 12.7 42.2 610 1978 64.3 501 1,258 78 12.8 39.8 642 1979 64.3 501 1,242 121 12.8 40.3 414 NA = Not available. 'The standard transaction price is paid to producers. If this price is lower than the support price, the difference is made up by a defi- ciency payment. 2The indicative price applies to the wholesale price of nonfat dry milk. The LIPC imports or makes adjustments in its stocks of nonfat dry milk to maintain the wholesale price between 104 and 90 percent of this price. 3Office of the Prime Minister, Monthly Statistics of Japan, various issues. “Ministry of Finance, Japan Exports and Imports, annual issues. Price includes commodity, insurance, and freight (c.i.f.). Table 21— Japan’s supply and distribution of dairy products' Japan fiscal year Production Imports Exports Change in stocks Supplies for domestic consumption Utilization Feed Waste Food Annual per capita consumption 1,000 metric tons Kg 1960 1,939 606 6 — 2,539 37 107 2,395 22.3 1961 2,180 391 12 — 2,559 42 115 2,402 24.9 1962 2,528 562 14 — 3,076 47 135 2,894 28.4 1963 2,843 831 15 — 3,659 54 158 3,447 32.8 1964 3,067 799 16 — 3,850 58 169 3,623 35.5 1965 3,271 507 -37 3,815 57 72 3,686 37.4 1966 3,321 580 — — 3,901 135 184 3,582 41.7 1967 3,662 964 — 135 4,491 65 87 4,339 43.3 1968 4,141 630 — 65 4,706 68 89 4,549 44.8 1969 4,575 568 — 135 5,008 62 94 4,852 47.3 1970 4,789 561 -5 5,355 58 102 5,195 50.1 1971 4,840 528 — - 103 5,471 46 106 5,319 50.7 1972 4,938 705 — -29 5,672 45 109 5,518 51.9 1973 4,902 1,032 — 27 5,907 43 115 5,749 52.9 1974 4,875 1,037 — 36 5,876 44 112 5,720 52.0 1975 5,010 787 -328 6,125 41 117 5,967 53.3 1976 5,370 1,068 — 103 6,335 43 120 6,172 54.6 1977 5,847 1,016 — 178 6,685 50 126 6,509 57.0 1978 6,261 1,044 — 291 7,014 51 132 6,831 59.3 1979 6,464 1,109 — 106 7,467 136 141 7,190 61.9 1980 6,501 1,026 8 -42 7,561 142 141 7,278 62.2 — = None or negligible. 'Fluid basis. Source: Ministry of Agriculture, Forestry, and Fisheries, Statistical Yearbook, food balance sheets in annual issues. 19 William T. Coyle Other policies are seemingly at odds with the country’s dairy policy, particularly policies affecting the imports of certain dairy products. Large amounts of nonfat dry milk (NFDM) under liberal quotas are imported for the School Lunch Program and for livestock feed. Formidable inter- est groups back the continuation of these imports to keep the Government cost of the School Lunch Program and feed prices as low as possible. Such imports contin- ue despite a surplus in domestic dairy products (table 21). Pork Sector Japanese peasants trapped wild boar as early as the sixth century, but with the advent of Buddhism in the seventh century, the eating of meats, including pork, was general- ly discouraged. The Okinawans and residents of southern Japan tried to preserve what they considered to be a deli- cacy (7, p. 6). During the Tokugawa Shogunate (1603-1867), when Japan traded principally with the Chi- nese and Dutch, hogs were imported in small numbers for breeding purposes. Until the 1850’s, most hog production took place in southern Japan where sweetpotatoes were in ample supply and served as a feedstuff. During the Meiji Restoration (1868-1912), hog production started to expand and spread throughout the country. In 20 years (1887 to 1907), the hog population increased by about seven times (7, p. 7). The Yorkshire and Berkshire breeds, well suited for confined feeding, were the preferred breeds from the late 1800’s to the 1960’s. By the seventies, the Landrace and crossbreeds were most prevalent. Structural Characteristics. Hog raising, like other livestock enterprises in Japan, has been characterized by a trend toward fewer and larger operations. The average herd size increased from 4 hogs in 1960-65 to 46 in 1975- 79, while the number of operators declined from 800,000 in 1960 to 156,000 in 1979 (table 22). Hog operations have generally been concentrated near urban areas in central Honshu and on the southern island of Kyushu. In recent years, pollution and zoning ordinances have forced oper- ators to locate farther from cities. Table 22— Composition of hog inventory, Japan Swine 6 months and over Average herd Calendar Under Females year Producers Total 6 Months Total for breeding Others size Number 1,000 head - Head 1960 799,120 1,918 1,140 778 246 531 2.4 1961 907,780 2,604 1,662 942 420 522 2.9 1962 1,025,260 4,033 2,395 1,638 529 1,108 3.9 1963 802,560 3,296 1,925 1,371 418 953 4.1 1964 711,200 3,461 2,189 1,272 465 807 4.9 1965 701,560 3,976 2,619 1,357 535 822 5.7 1966 714,300 5,158 3,456 1,702 698 1,005 7.2 1967 649,500 5,975 3,996 1,980 729 1,251 9.1 1968 530,600 5,535 3,793 1,742 651 1,090 10.4 1969 461,030 5,429 3,776 1,653 659 995 11.8 1970 444,500 6,335 4,422 1,912 816 1,096 14.3 1971 398,300 6,904 4,959 1,945 841 1,104 17.3 1972 339,700 6,985 5,087 1,890 853 1,045 20.6 1973 303,700 7,313 5,289 2,024 977 1,047 24.1 1974 277,400 8,018 5,898 2,140 1,009 1,130 28.9 1975 223,400 7,684 5,602 2,082 911 1,171 34.4 1976 195,600 7,459 5,478 1,981 962 1,019 38.1 1977 178,900 8,132 5,979 2,153 1,028 1,125 45.5 1978 165,200 8,780 6,474 2,306 1,093 1,213 53.2 1979 156,300 9,491 7,009 2,482 1,168 1,314 60.7 Source: Ministry of Agriculture, Forestry, and Fisheries, Statistical Yearbook, various issues. 20 Pork Pork production expanded by 13 percent per year during 1960-79, a rate second only to that of chicken production among livestock activities. Only during 1970-75 did the rate fall below 10 percent. Advances in management and technology, as well as profitable conditions, have raised the litter size, raised the slaughter weight, reduced the fattening period, increased the use of formula feed, and improved the efficiency of feed conversion. Despite rapid growth in Japanese pork production, con- sumption has risen even faster. Self-sufficiency has de- clined from 99 percent in 1960-65 to 88 percent in 1975-79 (table 23). Policymakers apparently feel that Japan can improve its self-sufficiency in pork in future years. Land is not a serious constraint and wholesale prices have re- mained competitive with import prices (table 24). Projec- tions made in 1975 indicate that Japan’s self-sufficiency in pork will reach 99 percent by 1985. Less ambitious pro- jections, released in November 1980, indicate 96-percent self-sufficiency by 1990. Feed cost is one of the chief costs in Japanese pork pro- duction, particularly with increased commercialization of the industry and greater reliance on formula feed. Use of formula feed has risen from an average of 282 kg per ani- mal in 1960-65 to 677 kg in 1975-80, a level that nearly ful- fills the total nutritional requirements of an average animal. Hogs are produced in complete farrow-to-finish opera- tions or divided into separate feeder pig and hog-finishing units. No information is available on the dimensions of either. Cost of production data reported on each phase of the production cycle indicate that the most important single cost in feeder pig production is feed (commercially purchased or self-supplied) accounting for nearly 60 per- cent of total costs. Labor accounts for an estimated 25 percent. In hog-finishing operations, the most important single ex- pense is for feeder stock. The larger operations spend Table 23— Japan’s supply and distribution of pork Japan fiscal year Domestic production Imports Change Exports in stocks Supplies for domestic consumption Waste Domestic utilization Gross food Ratio Net food Annual per capita consumption 7,000 tons— Percent 1,000 tons Kilograms 1960 149 6 — 155 3 152 82 125 1.3 1961 240 1 — — 241 5 236 82 194 2.1 1962 322 — — — 322 7 315 82 258 2.7 1963 271 8 279 6 273 82 224 2.3 1964 314 2 — — 316 6 310 82 254 2.6 1965 385 385 8 377 82 309 3.1 1966 542 — — 32 510 10 500 82 410 4.1 1967 546 — — -23 569 11 558 82 458 4.6 1968 511 18 — -11 540 11 529 82 434 4.3 1969 525 36 — — 561 11 550 82 451 4.4 1970 691 17 708 14 694 70 486 4.7 1971 755 29 — — 784 16 768 70 538 5.1 1972 780 89 — 869 17 852 70 596 5.6 1973 884 128 — 1,012 20 992 70 694 6.4 1974 966 71 — — 1,037 21 1,016 70 711 6.5 1975 891 208 — 41 1,058 21 1,037 70 726 6.5 1976 1,096 187 — 15 1,268 25 1,243 70 870 7.7 1977 1,189 161 - -23 1,373 27 1,346 70 942 8.3 1978 1,323 155 — 10 1,468 29 1,439 70 1,007 8.7 1979 1,465 176 - 15 1,626 33 1,593 70 1,115 9.6 1980 1,430 207 — -9 1,646 33 1,613 70 1,129 9.6 — = None or negligible. Source: Ministry of Agriculture, Forestry, and Fisheries, Statistical Yearbook, food balance sheets in annual issues. 21 Japan’s Feed-Livestock Economy more on this item than do the smaller ones, indicating their greater dependence on the feeder pig market. Feed costs are fairly uniform, about 35 percent of total costs, although smaller operations use less purchased feed and more that is self-supplied. Labor costs are estimated at 8-10 percent for these operations. In Japan, as in other countries, various intermediaries between the producer and consumer provide marketing services that add costs (value) to the retail price of the product. The size of the margin is a function of marketing efficiency (competition) as well as the amount and quality of the services embodied in the product after it leaves the farm. Japan’s marketing system is often cumbersome, with numerous intermediaries and small retail outlets. The pork producer in Japan receives about 30 percent of the consumer price, compared with 50-60 percent in the United States. The relative share of the consumer price received at each market level has been fairly constant over time. The producer and wholesale shares have de- clined slightly since 1960 and the retail share has in- creased slightly, but these shifts have not been very great. A confined hog operation in Yamanashi Prefecture. The average size of a Japanese pig herd increased greatly in the past 20 years, from about 3 animals in 1960 to about 60 in 1980. The average U.S. pig herd is about 300 ani- mals. Japanese consumption of pork in 1980 was about 9.6 kg per person, compared with 32 kg in the United States. Government Policies. The Government intervenes in the pork sector more so than in the poultry sector but less than in the beef and dairy sectors. Government objectives are to stabilize prices, to maintain producer income, and to raise self-sufficiency through price, stockholding, and trade policies. The Law on Stabilization of Livestock Product Prices (1961) authorizes MAFF to set annual wholesale floor and ceiling prices for domestic pork carcasses. When domes- tic pork prices approach the floor level, MAFF may have the LIPC purchase stocks of domestic pork and hold them in storage, or finance the storage of pork by agri- cultural cooperatives. As prices approach the predeter- mined ceiling price, stocks are released to the market. Voluntary action may also lead to reduced market sup- plies. In 1979, producers requested processed meat man- ufacturers to reduce voluntarily their use of imported pork. Table 24— Pork prices, Japan Calendar year A B C D - x 100 D Producer price Wholesale, carcass Retail, dressed pork Import unit value Percent 1960 207 346 642 178 194 1961 163 304 615 159 191 1962 167 278 569 239 116 1963 232 389 724 303 128 1964 214 373 753 281 133 1965 216 373 745 219 170 1966 190 325 694 281 116 1967 217 361 714 491 74 1968 277 438 849 394 111 1969 286 481 960 437 110 1970 237 397 909 439 90 1971 269 431 930 412 105 1972 285 456 992 449 102 1973 301 493 1,120 507 97 1974 382 559 1,240 640 87 1975 501 743 1,550 734 101 1976 451 747 1,680 835 89 1977 458 732 1,590 831 88 1978 427 691 1,570 834 83 1979 373 615 1,500 846 73 1980 415 627 1,450 852 74 1981 456 692 1,530 853 81 Source: Ministry of Agriculture, Forestry, and Fisheries, The Meat Statistics of Japan, Jan. 1982. 22 Pork The Government recognizes the potential impact of im- ports on domestic producers and controls imports as a part of its price stabilization policy. Japan’s pork imports increased greatly between 1968 (when imports consti- tuted about 3 percent of total pork supply) and 1979 (11 percent) with supplies coming mainly from the United States, Canada, Taiwan, and Denmark (table 25). During the sixties, import quotas and a flexible tariff system were administered. Since October 1971, pork imports have been controlled with a variable levy. The level of pro- tection is determined by the standard import price (also called the minimum import price— MIP) which is midway between the floor and ceiling prices for carcass pork. Un- less the levy is waived, pork imports are subject to the larger of a duty or a levy equal to the difference between the import price (c.i.f.) and the standard import price. If the Japanese want to encourage imports of carcass pork they replace the standard import price with pro- claimed prices, which are usually lower, and waive the du- ty on pork imports when import prices are above the pro- claimed price. Lower proclaimed prices reduce the pro- tective effect of the variable levy. In the case of pork cuts, however, proclaimed prices have been set higher than the standard import price, thus discouraging imports of higher value pork cuts. The Government generally obtained the desired effect in imposing or waiving the duty during the seventies. Waiv- ing the duty in 1972 and 1973 led to dramatic upsurges in pork imports. Pork imports more than doubled in 1972 and doubled again in 1973. When the duty was reinstated (Sept. 1973 through Oct. 1976), pork imports fell off almost as dramatically as they had risen earlier. The U.S. share of total pork imports dropped sharply when the duty was reapplied. The other principal suppliers also exported smaller volumes but the impact was not so severe. Euro- pean community subsidies and Canadian trading arrange- ments partially offset the adverse effects of the duty. Table 25— Japanese imports of pork Calendar year Total United States Australia Ryukyu Islands Canada Taiwan South Korea Denmark 1960 6 1 1,000 metric tons 1 3 1961 1 1 1 — — — — — 1962 — — — — — — — — 1963 7 6 — — — — — — 1964 4 4 — — — — 1965 — — — — — — — — 1966 — — — — — — — — 1967 — — — — — — — — 1968 10 9 — — — 1 — — 1969 43 29 4 — 2 6 1 — 1970 17 8 1 1 3 5 — — 1971 27 14 — 2 9 2 — — 1972 68 22 11 1 19 11 4 — 1973 126 41 13 1 20 34 2 — 1974 42 6 1 1 12 16 3 1 1975 125 43 3 1 26 8 8 24 1976 149 55 2 1 27 26 5 17 1977 108 24 — 1 35 18 5 17 1978 104 26 — ’ 31 15 — 22 1979 132 33 — 1 33 15 — 41 1980 108 30 - 30 17 — 29 1981 184 39 — 43 20 — 72 — = None or negligible. 'Not applicable. The Ryukus (Okinawa) became a part of Japan in 1972. Source: Ministry of Finance, Japan Exports and Imports, annual issues. 23 William T. Coyle Egg Sector A thriving layer industry had developed by the end of the Taisho era (1925) but World War II reduced the industry from 50 million birds to 15 million. After the war, flock owners throughout the country organized an association (which became the Japan Poultry Association) to help re- solve problems confronting the industry, particularly those of improving breeding stock, assuring chick and feed supply, and catching up with the West in managerial techniques. Structural Characteristics. Egg producers have ex- perienced the most rapid structural change since 1960 of any of Japan’s livestock industries. The number of pro- ducers declined dramatically and average flock size grew very rapidly, averaging 20 percent per year. Production is distributed across the country but is more concentrated near the population centers of central Honshu and Kyushu. Egg production expanded rapidly in the sixties, then slowed in the seventies in response to stable per capita consumption (table 26). Since the price of feed, the most important input in egg production, rose more rapidly than egg prices over the 1960-79 period, profitability was main- tained primarily through economies of scale as well as managerial and technical advances. The industry rapidly shifted away from the labor intensive practices of 20 years ago, when most eggs were gathered by hand and hens were housed under a farmer’s house or in a make- shift structure nearby. The cage system, introduced in the late fifties, was rapidly adopted by large and small pro- Table 26— Japan’s supply and distribution of eggs Japan fiscal year Domestic production Imports Exports Supplies for domestic consumption Seed Waste Domestic utilization Gross food Ratio Net food Annual per capita consumption -7,000 tons Percent 1,000 metric tons Kilograms 1960 547 7 540 17 10 513 89 457 4.9 1961 728 — 8 720 19 14 687 89 611 6.5 1962 780 — 6 774 20 15 709 93 658 6.9 1963 852 — 1 851 26 17 808 89 719 7.5 1964 991 — 1 990 27 19 944 89 840 8.6 1965 1,023 2 1,025 29 20 976 89 869 8.8 1966 1,079 5 — 1,084 36 21 1,027 89 914 9.2 1967 1,173 23 — 1,196 39 23 1,134 89 1,009 10.1 1968 1,367 36 — 1,403 45 27 1,331 89 1,185 11.7 1969 1,523 31 — 1,554 76 30 1,448 89 1,289 12.6 1970 1,761 47 1,808 52 35 1,721 89 1,532 14.8 1971 1,799 46 — 1,845 53 36 1,756 89 1,563 14.9 1972 1,795 37 — 1,832 56 36 1,740 89 1,549 14.6 1973 1,815 44 — 1,859 58 36 1,765 89 1,571 14.5 1974 1,793 41 — 1,834 57 36 1,741 89 1,549 14.1 1975 1,806 55 1,861 61 36 1,764 89 1,570 14.0 1976 1,861 51 — 1,912 64 37 1,811 89 1,612 14.3 1977 1,901 59 — 1,960 70 38 1,852 89 1,648 14.4 1978 1,980 56 — 2,036 72 39 1,925 89 1,713 14.9 1979 1,991 44 — 2,035 74 39 1,922 89 1,711 14.7 1980 1,990 49 — 2,039 75 39 1,925 89 1,713 14.6 — = None or negligible. Source: Ministry of Agriculture, Forestry, and Fisheries, Statistical Yearbook, food balance sheets in annual issues. 24 Eggs ducers alike. Egg production became more efficient as hens produced more and heavier eggs and required less feed to do so. The principal costs in egg production are feed, labor, and the cost of purchasing and maintaining pullets before they produce. These three categories represent about 95 percent of total production costs. Feed, which is mostly purchased formula feed, represents about two-thirds of total production cost. Use of formula feed over the period has remained constant at 44-46kg per year. Efficiency in converting feed has increased, offsetting rising feed prices. Japan’s self-sufficiency in egg production is the highest of any of its livestock activities, varying between 97 and 100 percent over the period. Official projections, which are plausible given the factorylike nature of the industry, indicate continued high levels of self-sufficiency through 1990. The marketing of eggs in Japan involves commercial dis- tributors, cooperatives, and feed-manufacturing com- panies. In the forties and fifties, botefuri gathered eggs from numerous small egg producers and transported them to wholesalers who delivered the eggs along with those collected from larger farms, to city markets. There they consigned the eggs to the large receiver markets for auction to city wholesalers. The auction system of trad- ing eggs has since been abandoned; the receiver markets now purchase and sell eggs on their own account. Urban wholesalers purchase eggs daily at receiver markets and distribute them to retail outlets, institutional users like restaurants and hotels, and industrial users like bakeries and mayonnaise producers (6). Cooperatives in each Prefecture also collect eggs from members, large and small, and eventually sell them to ur- ban markets. Formula feed manufacturers, through feed agents, play a marketing role by collecting eggs at farms on backhauls from feed deliveries. The feed companies act as collec- tion points in major city markets, selling eggs to large buyers. Supermarkets buy almost exclusively from feed companies. Government Policies. Government involvement in the egg sector has been more indirect than in the beef, dairy, and pork industries. Growth in specialization and scale of op- eration, however, has made producers increasingly vul- nerable to price fluctuations, prompting occasional Gov- ernment help. The Government intervened under the Ad- justment and Guidance of Egg Production and Marketing Act in 1966 to help organize the industry and to promote egg price stability. Prices were stabilized through pricing, stockholding, and production adjustment policies. Stable producer prices are guaranteed to subscribers through the Egg Price Stabilization Fund established in 1966 (table 27). The fund was created with contributions from agricultural cooperatives, Prefectural governments, and the LIPC. When market prices fall below a guaranteed price, the fund covers the difference. Subscribers pay a small fee per kilo of eggs sold to maintain the fund. About 40 percent of egg production is currently covered by this program. Certain trade policies are enforced from time to time to support domestic egg prices but these are usually of a voluntary nature. “Administrative guidance” is used with importers and processors to slow down or limit imports.7 There are no limits on imports of eggs or egg products, but tariffs restrict trade to some extent. The tariff on fresh eggs is 20 percent and on most egg products is either 25 percent or Y60 per kg, whichever is greater. The tariff on egg albumen will be reduced from 20 to 10 percent by 1987 as a result of the Tokyo round of multilateral trade negotiations (MTN). The Government also encourages stockholding when market prices are weak. In the sixties, the LIPC subsi- dized storage and interest costs of producer organiza- tions when egg prices dropped. The National Fluid Egg Manufacturers and Stockpiling Company was estab- lished in 1971 with capital from the Ministry of Agri- culture and Forestry (predecessor of MAFF), Prefectural governments, and producer organizations. When prices fall below a predetermined level, the company buys eggs and manufactures liquid egg, which is stockpiled and re- leased when prices strengthen. When prices are weak, the Government also intervenes to limit or curtail expansion of existing flocks as well as to reduce flocks through stepped-up culling. Owners of the larger layer flocks (more than 3,000 birds) are usually targeted. MAFF influences their behavior by restricting Government and cooperative subsidies of one sort or another, by using the moral suasion of “administrative guidance,” and by tying compensatory payments from the price stabilization fund to producer compliance. 'Administrative guidance (gyoseishido) consists of recom- mendations, advice, or directions issued by a Japanese Govern- ment agency but lacking any coercive legal power. 25 Japan’s Feed-Livestock Economy Broiler Sector Before World War II, Japan’s supply of poultry meat came primarily from culled layers. Chickens raised specifically for meat were almost entirely unknown in urban areas un- til 1930, when a merchant raised cockerels for Chinese restaurants in the Tokyo area (8, p. 3). World War II brought a sudden end to the rooster busi- ness because feed was scarce and the Government in- sisted that duck was a more efficient source of protein. A wealthier class emerged after the War which created a new market for chicken meat. By the early fifties, a grow- ing restaurant demand for chicken had developed and, in the sixties, home consumption of chicken began to ex- pand (8, p. 13). Structural Characteristics. Since the early sixties, the number of farms raising broilers in Japan has declined steadily. In 1964, there were twice as many farms raising broilers as there are today. At the same time, the total number of broiler chickens raised increased more than nine times. Broiler numbers stood at a little over 13 million in 1964 with most chicken meat coming from culled layers; by 1979, there were 125 million broilers. Culled layers represented only 10 percent of chicken meat production. The average number of broilers per farm in- creased from 1,850 in 1965-70 to more than 12,000 in 1979. Geographically, broiler production is concentrated in the central part of Honshu and southward. About one-third of production is concentrated on the southern island of Kyushu. Table 27 — Egg prices, Japan A B C D E Calendar year Producer price’ Wholesale price2 Retail price (Tokyo)3 Floor price4 Import unit value3 Ax 100 E Yen per kilogram 1961 NA NA 221 NA NA NA 1962 185 191 229 NA NA NA 1963 192 202 242 NA NA NA 1964 167 179 227 NA NA NA 1965 190 * 187 219 NA 152 123 1966 189 202 240 160 153 132 1967 190 193 228 162 157 123 1968 180 199 241 160 158 126 1969 186 190 226 160 160 119 1970 172 192 267 160 172 112 1971 176 188 229 160 174 108 1972 194 198 235 163 167 119 1973 217 217 259 168 192 113 1974 278 279 335 202 292 96 1975 268 303 348 273 309 98 1976 274 277 330 265 273 101 1977 264 304 365 267 298 102 1978 227 242 312 259 276 88 1979 251 243 314 215 270 90 1980 309 300 382 NA 315 95 NA = Not available. 'Ministry of Agriculture, Forestry, and Fisheries, Statistical Yearbook, various issues. 2Bank of Japan for 1962-73; Ministry of Agriculture, Forestry, and Fisheries, Monthly Statistics, various issues, for 1974-79. 3Office of the Prime Minister, Japan Statistical Yearbook, various issues. 4Egg price stabilization scheme introduced in 1966. includes egg in shell; fresh, chilled, or frozen (excluding hatching eggs) powdered whole eggs; egg yolks; etc. Ministry of Finance Japan Exports and Imports, various issues. 26 Broilers As in egg production, domestic broiler producers have supplied more than 95 percent of the country’s consump- tion requirements (table 28). There has been a slight decline in self-sufficiency since 1960, with imports mak- ing up 6 percent of total supplies in 1979. Imports of poultry meat come mainly from the United States, China, and Thailand (table 29). The major costs involved in broiler meat production are for feed, chicks, and labor. Other less significant costs in- clude those for light, heat, water and power, buildings, and equipment. Feed represents the largest single cost, over two-thirds of the total, but has declined somewhat through the seventies. In 1974, when world grain prices were very high, feed costs amounted to 73 percent of total production costs but have subsequently declined to about 67 percent. The costs of chicks and labor are sig- nificant, averaging 16 and 8 percent, respectively. Econ- omies of scale and technical advances have helped offset declining real producer prices over the years (table 30). Before 1965, chick supply, feed supply, and broiler raising typically were carried on as separate and discrete ac- tivities. Today, a typical broiler operation encompasses all these activities. Trading companies like Mitsui, Mit- subishi, and Marubeni are increasing their share of broiler production as are food companies and agricultural coop- eratives. Hatcheries and feed mills, owned by or affiliated with integrated broiler companies, sell chicks and feed to broiler producers. The same companies purchase, proc- ess, and market the 8- to 10-week-old birds. Integrated op- Table 28— Japan’s supply and distribution of chicken meat Japan fiscal year Domestic production Imports Exports Change in stocks Supplies for domestic consumption Waste Domestic utilization Gross food Ratio Net food Annual per capita consumption 1,000 Percent metric tons 1960 44 44 1 43 77 33 .4 1961 97 — — — 97 2 95 77 73 .8 1962 121 — — — 121 2 119 77 92 1.0 1963 142 5 — — 147 3 144 77 111 1.2 1964 181 4 — — 185 4 181 77 139 1.4 1965 205 8 213 4 209 77 161 1.6 1966 261 7 — — 268 5 263 77 203 2.0 1967 303 10 — — 313 6 307 77 236 2.4 1968 336 18 — — 354 7 347 77 267 2.6 1969 423 20 — — 443 9 434 77 334 3.3 1970 505 12 517 10 507 77 390 3.8 1971 571 30 1 — 600 12 588 77 453 4.3 1972 638 27 1 — 664 14 650 77 501 4.7 1973 706 26 1 — 731 15 716 77 551 5.1 1974 730 21 — — 749 15 734 77 565 5.1 1975 756 28 3 781 16 765 77 589 5.2 1976 834 40 2 — 872 17 855 77 658 5.8 1977 944 48 3 6 983 20 963 77 742 6.5 1978 1,022 66 3 — 1,085 22 1,068 77 819 7.1 1979 1,095 69 3 -5 1,166 23 1,143 77 880 7.6 1980 1,113 80 4 2 1,187 24 1,163 77 896 7.7 — = None or negligible. Source: Ministry of Agriculture, Forestry, and Fisheries, Statistical Yearbook, food balance sheets in annual issues. 27 William T. Coyle Table 29— Japanese imports of poultry meat Calendar year Total United States China Denmark Bulgaria Hungary Thailand 1963 3 3 1,000 metric tons 1964 6 5 — — — — — 1965 6 5 1966 8 5 1 1 — — — 1967 8 5 1 2 — — — 1968 16 6 2 4 2 1 — 1969 20 6 2 5 3 3 — 1970 11 5 2 1 1 2 1971 27 7 5 3 5 4 — 1972 29 8 7 3 5 5 — 1973 25 9 9 2 2 3 — 1974 25 11 5 4 1 2 1 1975 22 12 6 1 1976 38 24 5 1 — 1 2 1977 48 33 5 — — 1 4 1978 62 39 9 — — 1 9 1979 72 41 12 — — 1 14 1980 72 42 12 16 1981 99 60 14 — — — 25 — = None or negligible. Source: Ministry of Finance, Japan Exports and Imports, annual issues. Table 30 — Chicken prices, Japan Calendar year A B C D B-x 100 D Calendar year A B C D JLx 100 D Producer price Wholesale price Retail price Import unit value Producer price Wholesale price Retail price Import unit value Percent Percent I 1 1 fj Ui A/il/yf dlii 1960 154 245 483 183 134 1970 192 234 767 271 86 1961 150 234 502 261 90 1971 199 261 712 241 108 1962 148 248 686 312 79 1972 184 236 724 236 100 1963 158 247 718 265 93 1973 231 268 801 284 94 1964 143 228 721 249 92 1974 267 310 960 366 85 1975 291 341 1,000 373 91 1976 295 353 1,110 366 96 1977 295 349 1,040 357 98 1965 198 253 718 270 94 1978 256 298 1,030 300 99 1966 186 244 724 274 89 1979 241 277 993 342 81 1967 197 243 728 253 96 1968 206 248 744 245 101 1980 261 299 1,140 352 85 1969 181 234 748 268 87 1981 277 324 1,200 369 88 Source: Ministry of Agriculture, Forestry, and Fisheries, The Meat Statistics of Japan, Jan. 1981; Ministry of Finance, Japan Exports and Imports, various issues. 28 Fish erations have contributed considerably to the rapid de- velopment of Japan’s broiler industry. Government Policies. There are no Government-funded programs for the broiler industry. The Government aids producers through research as well as disease prevention and treatment programs. There is a price stabilization fund for broilers similar to that for eggs that was set up in 1970 by the National Sales Federation of Agricultural Cooperatives (Zenhanren) and the National Purchase Federation of Agricultural Cooper- atives (Zenkoren). It differs from the egg fund in that there is no Government participation. From time to time, MAFF has used “administrative guid- ance’’ (gyoseishido) to influence production and trade decisions that might affect broiler prices. Large broiler producers were urged in 1975, for example, to reduce pro- duction to assure greater profitability for smaller and less efficient producers. Poultry imports are affected to some extent by tariffs, which range from 10 percent on chicken livers and turkey to 20 percent on chicken meat. The 1978 MTN agreement will reduce the tariff on chicken legs from 20 to 10 per- cent and on turkeys from 10 to 5 percent by 1987. Japan’s Fishery Industry Prospects for the livestock industry are closely tied to de- velopments in fisheries. Fish, as mentioned previously, is a traditional food and is central to Japan’s diet, whereas livestock products, although growing in popularity, still are less important. The popularity of fish in Japan is no accident. Many miles of coastline and favorable cur- rents—the warm Kuroshio from the south and the cold Oyashio from the north— create an ideal environment for many species of fish and other marine life. The Japanese fishing industry exploits these as well as more distant fishery resources for a growing and increasingly affluent population. World War II severely damaged Japan’s fishing industry; not until the early fifties did Japan’s total fish catch reach prewar levels. Japanese fishing hauls since 1960 have risen by about 3 percent per year. Growth was especially rapid during the late sixties and early seventies, when the country exploited more distant fisheries, mainly Alaskan pollack off the coasts of Alaska, western Canada, the northwestern United States, and the northeastern Soviet Union. Since 1972, Japan's fish catch has stabilized be- tween 10 million and 11 million tons, or about 15 percent of the world catch (which has also stabilized at between 66 million and 72 million tons). Conservation of oceanic resources and questions of re- source distribution were discussed at the third U.N. Con- ference on the Law of the Sea in 1973. Shortly afterward, more than 80 coastal nations followed the practice of several Latin American countries in claiming 200-mile ju- risdictional zones over fishery resources. Enforcement of such zones has been disruptive to Japan since a third of its fish catch had previously been taken within 200 miles of other countries. A flexible public policy that incor- porates elements “common to the experiences of the centrally planned economies” as well as those “common to some market economies” (2, p. 189) has helped Japan’s fishery industry meet the challenge of the 200-mile zones. Changes in the structure of Japan’s fishery industry and in the Government’s role are described below. Japanese fisheries, which account for about 1 percent of the country’s GNP, have undergone changes in structure, resembling those in the livestock industry in some ways. The number of firms engaged in fishing declined, while their average size increased in terms of the number and gross tonnage of vessels. In 1960, there were about 230,000 fishery firms, with an average of 1.7 vessels av- eraging 4.6 tons; in 1979, there were about 220,000 firms with an average of 2 vessels, each weighing about 6.1 tons. The number of vessels in Japan’s fishing fleet in- creased by less than 1 percent per year but gross tonnage increased more rapidly as larger vessels were used to ex- ploit more distant fisheries. Distant fisheries, both within the 200-mile zones of other countries and on the high seas, became extremely impor- tant to Japan during the sixties and early seventies, but declined thereafter because of rising energy costs and the advent of the 200-mile zones.* * * * * 8 Coastal and offshore fisheries have now returned to their previous prominence as the country’s principal sources of fish.9 Marine aqua- culture, although relatively limited, has grown more rapid- ly than any other source since 1960; but it still represents only 8 percent of the total catch by weight and 16 percent by value. Fresh water inland resources and whaling are even more limited (table 31). eDistant fisheries include mother ship enterprises, large trawl operations in the East China Sea, distant water trawling, tuna longline, skipjack pole-and-line, North Pacific Ocean tanner crab, longline and gill net fishing. Major target species include Alaskan pollack, flat fish, tuna, skipjack, salmon, trout, and tan- ner crabs (37, p. 3). 9Coastal fisheries include shellfish and seaweed collection, set net and beach seine operations, and enterprises using non- powered boats of less than 10 gross tons. Offshore fisheries in- clude near-shore operations with powered boats of more than 10 gross tons, shellfish and seaweed collection, set net and beach seine operations. The dominant species caught by this industry are mackerel, sardine, anchovy, and squid (37, p. 3). 29 Japan’s Feed-Livestock Economy Changes in the location of Japan’s fishing grounds have affected the composition of the fish catch and the kind of equipment used. Sardine and mackerel are the most com- mon species caught, accounting for about a third of the current catch. Changes in wholesale prices have reflected the changing supply and demand conditions for various fish. Hauls of cheap fish have tripled in the past two decades and pro- ducer prices have declined somewhat in real terms (37, p. 13). Production growth slowed somewhat in the seventies with the decline in catches of Alaskan pollack more than offset by increases in sardine, mackerel, and saury (37, p. 15). In contrast, production of table fish declined from 2 million to 1.5 million tons since 1960, while producer prices tripled in real terms. Species contributing to the decline include horse mackerel and herring. Luxury fish production has been relatively stable since 1960 with real prices more than doubling (table 32). Larger operations are apparently in a cost-price squeeze because of higher energy costs, the advent of 200-mile fishing limits, and the relatively low price of fish species taken from foreign coastal zones. Rates of return on in- vestment and profit margins were generally more favor- able before 1973 than afterward for all sizes of firms. Av- erage total costs, the most important of which are labor and energy, rose by 24 percent in 1974 because of higher oil prices (37, p. 10). The smaller firms seem to have ad- justed more easily while intermediate and larger firms did less well in terms of profit margin growth and return on investment (37, p. 51). While Japan seems to have had little problem maintain- ing a supply of cheap fish, shortages of higher value fish, both from distant fisheries and from coastal areas, have led to increased dependence on imports. Japan’s self-suf- ficiency in fish production declined from an average of 105 percent in 1960-65 to 93 percent in 1979. Imports ex- ceeded exports in 1968 and 1973 and consistently after 1975 (table 33). The Japanese Government has intervened in a number of ways recently to compensate the industry for a declining catch in foreign waters. First, the Government made the fishing issue a more visible priority by renaming the Min- istry of Agriculture and Forestry (MAF) the Ministry of Ag- riculture, Forestry, and Fisheries (MAFF) in July 1978. In The fleet shown here is tied up at a pier in Kushiro, Hok- kaido. Fish are still by far the most important source of protein in the Japanese diet, accounting for about 45 per- cent of total animal protein. The Japanese annually consume more than 40 kg per person, compared with 6 kg in the United States. 30 Fish the reorganization that followed, Akira Matsuura of the Japan Fisheries Agency (JFA) was promoted to General Affairs Counselor in the Ministry Secretariat and given the responsibility of coordinating efforts related to the trade of agriculture, forestry, and fishery products with foreign countries. The overall work force of the fisheries agency was increased, and the number of its departments and divisions was expanded. A new department was set up to promote the development of coastal and inland fish- eries and aquaculture. The JFA has always had the role within the Ministry of managing the country’s fishery resources. Its regulatory function, which is shared with Prefectural governments, has been exercised through the power of licensure. This has led to control of the number and size of fishing ves- sels as well as the seasons of the year and the areas in which fishing is allowed. More recently, with limited ac- cess to foreign waters and an increased threat of in- dustrial pollution to home waters, Agency involvement in developing coastal resources has intensified.10 A national 7-year plan that began in 1976 earmarked ¥ 200 billion (25, p. 27) for such activities as: • Creating artificial habitats in bays and inland seas suitable for breeding and growth of fish and other marine products. • Propagating fish in on-land facilities for eventual release into coastal waters. • Expanding salmon-hatching facilities. • Rehabilitating coastal areas damaged by pollu- tion. Most of these projects are administered by Prefectures with subsidies from the national Government. Second, the Government established its own 200-mile zone in July 1977 and has sought to protect its interests in more tightly regulated foreign waters. Before 1977, about 25 percent of Japan’s total catch was taken from the coastal waters of the United States and the Soviet Union (table 34). Fishery negotiations with both countries have taken place once or twice a year since 1977. The Jap- anese have succeeded in maintaining a large quota in U.S. waters (in excess of 1 million tons). However, this quota could shrink as a result of the U.S. Fisheries Pro- motion Act passed in December 1980, which provides for gradual reduction of foreign access to U.S. waters as the U.S. fishery industry takes greater advantage of U.S. coastal resources. Proposed increases in access fees to U.S. waters will also reduce foreign fishing by making it more expensive. Japan has maintained a reciprocal agreement with the Soviet Union which allows Soviet access to Japanese waters in exchange for Japanese access to Soviet waters, including those around the disputed Northern Territories (the Kuril Islands, occupied by the Soviet Union since the end of World War II). Recent quotas have been 600,000- 800,000 tons for both sides. Special negotiations are held on salmon, a migratory species whose ownership is claimed by the country in whose rivers the fish spawn. Third, the Government is promoting the consumption of lower grade seafood such as sardines and krill, which are '“Thermal, industrial wastes, and nonpoint agricultural pollu- tion are among the more important kinds of pollution. Industrial wastes, for example, have caused “red tide” blooms along Ja- pan’s inland sea that have reduced marine aquaculture produc- tion. The “red tide” occurs when industrial waste and sewage cause the mass breeding of red plankton. The oxygen depletion that results often causes large fish losses. In Hokkaido, live- stock urine seeps into nearby rivers killing artificially hatched salmon. Table 31— Japan’s fish catch, by location Location 1960 1965 1970 1975 1976 1977 1978 1979 1980 (est.) 1,000 metric tons Offshore 2,515 2,788 3,279 4,469 4,656 4,924 5,559 5,488 4 788 Coastal 1,893 1,861 1,889 1,935 2,000 2,107 1,990 1,953 Aquaculture 285 380 549 773 850 861 917 883 992 Distant fisheries 1,410 1,733 3,429 3,168 2,949 2,657 2,134 2,035 2,090 Other 90 146 169 200 201 208 228 231 222 Total 6,193 6,908 9,315 10,545 10,656 10,757 10,828 10,590 11,092 Number Whales 19,649 26,986 16,887 13,427 9,632 9,299 5,924 4,918 5,191 Source: Ministry of Agriculture, Forestry, and Fisheries, Fisheries Statistics of Japan, 1979; 1980 data are estimates released May 29, 1981. 31 William T. Coyle expected to be in more plentiful supply. About 70-75 per- cent of the total fish supply is used for human consump- tion and, of that amount, 47-48 percent is lost in proces- sing (table 33). If some of this waste could be reduced through more efficient processing and marketing, the same size catch would yield more food. Fourth, the Japanese Government has spent substantial amounts to promote favorable relations with other coast- al countries, mainly in the Pacific area. Technical assis- tance and grant aid have been extended for fishery pro- jects in various countries (25, pp. 29, 30). In 1977, the Overseas Fishery Cooperation Foundation (OFCF) was set up to provide low-interest loans for Japanese joint ventures in other countries. By March 1980, loans had been made totaling about $100 million for 82 projects in 26 countries (25, p. 32). The Government-supported Marine Fishery Resources Development Center, estab- lished in 1971, has collaborated with other countries in surveying new fishery grounds for potential development and commercialization (25, p. 33). Table 32— Japan: Change in production and prices of fish, 1960-77 Type of fish' Production Real producer price Percent per year Cheap 7.0 - 1.8 Table - 1.9 7.2 Luxury .4 4.6 Total 2.7 2.2 ’Species of fish are grouped according to their producer prices (37, pp. 12, 13). Cheap fish include sardines, mackerel, and Alaskan pollack; table fish include crab, herring, squid, and cod; luxury fish include tuna, shrimp, salmon, and trout. Table 33— Japan’s supply and distribution of fish and shellfish Supplies Domestic utilization Japan for Annual fiscal domestic per capita year Production Imports Exports consumption Feed Gross food Ratio Net food consumption 1,000 1,000 metric tons Percent metric tons Kilograms 1960 5,803 100 520 5,383 983 4,400 59.0 2,596 27.8 1961 6,284 135 524 5,895 1,136 4,759 59.0 2,808 29.8 1962 6,363 205 654 5,914 1,091 4,823 59.0 2,845 29.9 1963 6,273 438 598 6,113 1,150 4,963 58.0 2,879 29.9 1964 5,989 572 716 5,845 1,380 4,465 55.0 2,456 25.3 1965 6,502 655 680 6,477 1,429 5,048 57.0 2,877 29.2 1966 6,666 625 767 6,524 1,361 5,163 56.0 2,891 29.2 1967 7,316 605 727 7,194 1,649 5,545 56.0 3,095 30.9 1968 8,150 927 811 8,266 2,329 5,937 55.2 3,277 32.3 1969 8,171 750 783 8,138 2,220 5,918 53.2 3,148 30.7 1970 8,778 745 908 8,615 2,266 6,349 52.4 3,327 32.1 1971 9,323 551 949 8,925 2,128 6,797 50.9 3,459 32.9 1972 9,632 798 1,067 9,363 2,388 6,975 51.2 3,572 33.6 1973 10,063 1,079 991 10,151 2,895 7,256 51.4 3,730 34.3 1974 9,962 779 996 9,745 2,261 7,484 51.5 3,854 35.0 1975 9,897 1,071 990 9,978 2,467 7,511 51.6 3,876 34.6 1976 9,974 1,136 1,029 10,081 2,473 7,608 51.8 3,939 34.8 1977 10,065 1,848 852 10,319 2,815 7,504 51.8 3,887 34.1 1978 10,335 1,479 1,046 10,850 3,036 7,754 52.8 4,094 35.5 1979 9,948 1,707 1,015 10,736 3,190 7,546 52.7 3,977 34.2 1980 10,396 1,689 1,023 10,704 2,995 7,709 52.8 4,070 34.8 Source: Ministry of Agriculture, Forestry, and Fisheries, Statistical Yearbook, food balance sheets in annual issues. 32 Feed Table 34— Japan’s fish catch by region Item 1974 1975 1976 1977 1,000 mt Percent 1,000 mt Percent 1,000 mt Percent 1,000 mt Percent Within foreign 200- mile zones 4,256 39.4 3,744 35.5 3,496 32.8 2,897 26.9 United States 1,585 14.7 1,410 13.4 1,348 12.7 1,187 11.0 Soviet Union 1,630 15.1 1,396 13.2 1,229 11.5 698 6.5 Canada 26 .2 21 .2 25 .2 18 .2 China 180 1.7 152 1.4 118 1.1 178 1.7 North and South Korea 209 1.9 241 2.3 207 1.9 173 1.6 Australia 18 .2 12 .1 8 .1 9 .1 New Zealand 78 .7 80 .8 166 1.6 244 2.3 Other 530 4.9 432 4.1 395 3.7 390 3.6 Within Japan’s 200- mile zone 5,236 48.4 5,503 52.2 5,682 53.3 6,360 59.1 Waters of the Northern Territories' 221 2.0 300 2.8 275 2.6 209 1.9 High seas and fresh water 1,316 12.2 1,298 12.3 1,478 13.9 1,500 13.9 Total 10,808 100.0 10,545 100.0 10,656 100.0 10,757 100.0 World catch 71,340 * 71,004 * 74,717 * 73,501 # * = Not applicable. 'The ownership of the four islands known as the Northern Territories is claimed by both the Soviet Union and Japan. Source: Ministry of Agriculture, Forestry, and Fisheries, unpublished data. Fifth, Japan has adjusted its trade policy to allow greater trade in marine products. Japan has limited trade through import quotas on six categories of fish and marine prod- ucts, a tariff quota on fishmeal, and ad valorem tariffs ranging from 5 to 15 percent on many marine products." Protection of Japan’s fishery industry, like protection of its agriculture, is a sensitive political issue. More than 400,000 individuals are directly involved in fishing and many others in supporting industries. But with its total catch leveling off because of limited access to foreign waters, Japan has relied more heavily on trade, particular- ly since 1975. Some countries have called for liberaliza- tion of trade in marine products as a quid pro quo for Jap- anese access to their coastal waters. The MTN agree- ment (1978) brought about a phased reduction of tariffs through 1987 on 22 marine products. "Import quotas apply to smoked herring, wet or dried edible seaweed, prepared edible seaweed, and the following fishes, whether live, fresh, chilled, frozen, salted in brine, or dried: her- ring, cod (including Alaskan pollack) and its roe, yellowtail, mackerel, jack mackerel, sardine, saury, squid (including cuttle- fish), scallop, and shellfish adductor (ligament). Japan’s Feed Supply The rapid growth in Japan’s livestock sector during 1960-80 would not have been possible without adequate and reasonably priced supplies of animal feed. Feed en- compasses a wide range of animal foods from grasses and forages to grains, protein meals, and food byprod- ucts. Since what is considered feed, as opposed to hu- man food or just plain waste, changes with economic conditions, it is difficult to assess a country’s feed sup- ply at any given time. Japan’s feed supply is perhaps somewhat easier to assess than that of other countries since much of its feed is imported and marketed commer- cially. Most of Japan’s limited and high-priced land has been cultivated in high-income crops such as rice, vege- tables, and fruit rather than in low-income grasses and feed crops. Japan’s land has been less and less able to supply the re- quired nutrients for its expanding livestock population. Domestically produced pasture, forage crops, and farm and food processing byproducts, which provided 60 per- cent of feed requirements in the early sixties, now pro- vide about 30 percent and have shown virtually no growth 33 Japan’s Feed-Livestock Economy in 20 years (table 35). Imports have become increasingly important and now provide two-thirds of Japan’s nutri- tional requirements for its livestock. This section examines the primary sources of animal nu- trition in Japan and important governmental policies that affect feed supply and prices. Formula Feed Formula feed has become the most important source of animal nutrition to Japan’s livestock producers, repre- senting about 60 percent of total feed supply (in terms of total digestible nutrients— TDN) and 80 percent of total concentrates.12 Formula feed consumption per animal in- creased for every major livestock category as producers became more commercialized and demanded feeds of higher quality and higher energy value (tables 36 and 37). ,2Formula feed includes partially complete and complete mixed feed. A complete feed, from a nutrient standpoint, sup- plies all requirements necessary for maintaining animal health. The changing needs of livestock producers, the end use, and the price all affect the composition of formula feed. In general, grain, soybean meal, and animal protein meals are used more now than they were 20 years ago, while brans and fishmeal are used less. Poultry and pork ra- tions have always been relatively high in grain. Beef and dairy rations use less grain and more bran. Dairy feed, which is low in grain and high in protein, supplements other available sources of nutrition, like pasture and silage (table 38). Prices have affected the ingredient mix of formula feed. Japanese mills, like all modern mills, use linear program- ing techniques to produce rations at the lowest cost. Ac- cording to one study, corn, sorghum, brans, and barley have been the principal price-dependent elements in Ja- pan’s formula feed production. Soybean meal is treated as a residual ingredient supplying the balance of protein and TDN not supplied by the price-dependent ingredients and those that are relatively fixed in the ration (3). Table 35— Japan’s total feed supply Calendar year (A) (B) (C) (D) (E) (F) Self- sufficiency (T *100) Total utilization Roughage Total concentrate feed Domestically produced material' Imported material processed2 Imported j material ! Percent 1960 10,423 4,877 5,671 1,683 2,090 1,898 63 1965 13,359 4,519 8,840 2,771 1,136 4,932 55 1970 18,394 4,656 13,739 2,297 2,176 9,266 38 1971 18,740 4,625 14,115 3,323 2,287 8,506 42 1972 20,253 4,737 15,516 3,153 2,475 9,888 39 1973 20,549 4,538 16,011 2,605 2,358 11,048 35 1974 20,026 4,784 15,242 2,077 2,526 10,639 34 1975 19,867 4,793 15,074 2,060 2,639 10,375 34 1976 21,402 4,815 16,587 1,944 2,690 11,952 32 1977 22,782 4,879 17,903 1,844 2,805 13,255 30 1978 24,114 5,181 18,933 1,792 3,102 14,039 29 1979 25,529 5,175 20,354 1,888 3,181 15,285 28 1980 25,640 5,165 20,475 1,963 3,261 15,251 28 1981 26,206 5,495 20,711 2,347 3,327 15,037 30 1990 32,730 9,410 23,320 1,960 4,010 17,350 35 ’Grain and byproducts, fishmeal, and nonfat dry milk, imported products, like soybeans, that are crushed in Japan. 3ln terms of total digestible nutrients. Source: Japan Feed Association, Yearly Report on Concentrate Feed, various issues; and Ministry of Agriculture, Forestry, and Fisheries, The Long-Term Prospects for the Demand and Supply of Agricultural Products, Nov. 1980. 34 Feed A modern formula feed mill in Yokohama; like all modern mills, it uses linear programming techniques to produce least-cost rations. Grain is unloaded from the docks and stored in silos (top picture). Operator (bottom left) monitors the mixing of different livestock rations. Grains are fed from the silos and combined with other ingre- dients in the central mixing bin (bottom right). 35 William T. Coyle Table 36 — Average annual formula feed consumption per animal, Japan Type of livestock 1960-65 1965-70 1970-75 1975-80 1980 Kilograms Beef cattle 15 230 789 1,088 1,223 Swine 282 500 627 677 640 Broilers NA NA 5.2 5.4 5.4 Layers 45.9 45.0 43.9 45.7 46.0 Dairy cattle 530 823 1,021 1,101 1,088 Note: February inventory numbers and annual feed amounts are used in all cases except for broilers. NA = Not available. Source: Japan Feed Association, Feed Monthly, various issues; Ministry of Agriculture, Forestry, and Fisheries, Meat Statistics of Japan, Jan. 1981. Table 37— Average annual growth in use of formula feed, Japan Type of livestock 1960-651965-701970-751975-79 1979 1,000 Percent change metric tons Total formula feed 23.2 13.0 2.3 7.8 22,438 Beef cattle NA 62.6 12.0 13.2 2,536 Swine NA 17.3 2.9 9.2 6,911 Broilers NA 27.0 9.0 9.3 3,302 Layers NA 7.4 -1.2 2.6 7,229 Dairy cattle NA 16.7 1.0 6.4 2,350 NA = Not available. Source: Japan Feed Association, Feed Monthly, various issues. Japan’s formula feed industry has expanded along with increased demand for formula feed with little foreign competition. The number and size of bonded mills in- creased rapidly in the sixties.'3 The early seventies brought on adjustment as a depressed livestock sector reduced feed sales and forced smaller mills out of busi- ness. The number of bonded mills remained about the same through the seventies. The increased concentration of the industry, higher non- ingredient costs (land, labor, and capital), higher quality ingredients, and increased uncertainty about the future led to increases in feed prices that at times outpaced price increases of imported ingredients. Feed prices paid by livestock producers are now, in some instances, 60-70 percent higher than similar feeds in the United States, compared with a 10-20 percent difference in the sixties. Higher quality imported ingredients like corn, sorghum, and soybean meal represented about 62 percent of for- mula feed ingredients in 1965 and 74 percent in 1979. In- gredient costs that once accounted for 90 percent of for- mula feed costs (17, p. 11) now account for 75-80 percent (45, ii). Greater concentration in the industry is evident 13The Japanese Government requires that all formula feed manufacturers who wish to become an authorized or bonded mill must have a Government license. The Government has two points of control over mill operations. First, when a manufac- turer wants to establish an operation using imported feed ma- terials, it must receive an operating license. Second, an es- tablished feed maker that wants to open a new mill or expand an old one must have a license to do so. (5, p. 1-21, 22). from increased production and lack of growth in the num- ber of bonded mills. Zennoh (a national federation of co- operatives) alone controls more than 40 percent of the market. Its board members review the market situation each quarter and, in consultation with the Ministry of Ag- riculture, set prices for the following quarter. The rest of this oligopolistic industry usually follows suit. High feed prices contribute to relatively high costs of livestock pro- duction-costs are two to five times higher than in the United States, depending on the type of livestock. High feed and total costs have made it essential that the Gov- ernment protect domestic livestock producers from for- eign competition. Simple and Other Feeds Other concentrates such as simple feeds (two ingredi- ents such as flaked corn and soybean meal) and farm and food-processing byproducts became less important to Ja- pan’s livestock producers over the past 20 years. Formula feeds replaced such products as barley bran, sweet- potatoes, and white potatoes as producers demanded feeds that provided more rapid weight gain, more effi- cient conversion, and lower labor requirements. The Gov- ernment encouraged the shift by allowing only bonded formula feed mills to import ingredients duty-free. Non- bonded mills that specialized in simpler feeds were forced to accept higher import prices for their raw materials. Nonetheless, the use of simple feeds increased through the seventies as more and more producers sought to mix their own rations to meet specialized needs. Barley, corn, 36 Feed Table 38— Japan: Components of formula feed by livestock category Years Grains Wheat and rice brans Vegetable protein meal Fishmeal and solubles Nonfat dry milk and other animal meals Other' Total 1,000 metric tons2 All livestock feed: 1960-65 3,139 533 794 358 53 801 5,678 (55.3) (9.4) (14.0) (6.3) (0.9) (14.1) (100.0) 1965-70 6,762 632 1,814 507 114 1,577 11,406 (59.3) (5.5) (15.9) (4.4) (1.0) (13.8) (100.0) 1970-75 10,384 681 2,627 639 147 2,253 16,731 (62.1) (4.1) (15.7) (3.8) (0.9) (13.5) (100.0) 1975-79 12,901 683 2,881 699 339 2,401 19,904 (64.8) (3.4) (14.5) (3.5) (1.7) (12.1) (100.0) Dairy feed: 1963-65 162 160 182 4 5 217 730 (22.2) (22.0) (24.9) (0.5) (0.7) (29.7) (100.0) 1965-70 345 192 357 5 12 322 1,233 (28.0) (15.5) (28.9) (0.4) (1.0) (26.1) (100.0) 1970-75 621 222 491 5 24 489 1,852 (33.5) (12.0) (26.5) (0.3) (1.3) (26.4) (100.0) 1975-78 763 245 500 3 24 531 2,066 (36.9) (11.9) (24.2) (0.1) (1.1) (25.7) (100.0) Beef cattle feed: 1964-65 31 14 13 — — 12 71 (43.7) (19.7) (17.6) — — (16.9) (100.0) 1965-70 211 50 68 — — 60 393 (53.7) (12.6) (17.4) — — (15.3) (100.0) 1970-75 886 130 157 1 1 245 1,422 (62.3) (9.2) (11.0) — — (17.2) (100.0) 1975-78 1,184 171 186 3 10 425 1,981 (59.8) (8.6) (9.4) (0.1) (0.5) (21.5) (100.0) Poultry feeds: 1963-65 3,247 246 654 344 44 511 5,046 (64.4) (4.9) (13.0) (6.8) (0.8) (10.1) (100.0) 1965-70 4,511 150 957 407 74 732 6,831 (66.0) (2.2) (14.0) (6.0) (1-1) (10.7) (100.0) 1970-75 5,819 129 1,293 479 89 1,013 8,822 (66.0) (1.5) (14.7) (5.4) (1.0) (11.5) (100.0) 1975-78 5,483 113 1,317 515 194 998 9,620 (67.4) (1.2) (13.7) (5.3) (2.0) (10.4) (100.0) Swine feeds: 1963-65 637 188 155 41 6 248 1,275 (50.0) (14.7) (12.2) (3.2) (0.4) (19.5) (100.0) 1965-70 1,598 227 376 84 17 407 2,709 (59.0) (8.4) (13,9) (3.1) (0.6) (15.0) (100.0) 1970-75 3,019 197 674 145 29 483 4,547 (66.4) (4.3) (14.8) (3.2) (0.6) (10.6) (100.0) 1975-78 3,785 141 790 162 86 456 5,420 (69.8) (2.6) (14.6) (3.0) (1.6) (8.4) (100.0) — = None or negligible. 'For example, other brans, alfalfa meal pellets, and molasses. "Numbers in parentheses are percentages. 37 Figure 1 Distribution of Livestock, by Prefecture, and Fisheries Beef Cattle Dairy Cattle Broilers (in thousands) Fisheries I I 0-9,999 establishments □ 10,000-14,999 □ 15,000-24,999 ■ 25,000-34,999 H 35,000 and over Seto Western Japan Sea region East-China Inland Sea Sea region .region Northern Japan Sea region Northern Pacific Ocean region Southern Pacific Ocean region Middle Pacific Ocean region 38 Figure 2 Production and Consumption of Livestock Products and Fish in Japan Beef and Veal Dairy Products 1,000 Metric Tons 1,000 Metric Tons Pork 1,000 Metric Tons Chicken 1,000 Metric Tons Eggs 1,000 Metric Tons Fish 1,000 Metric Tons For explanation of projections, see section titled "The Future of Japan's Feed-Livestock Economy," in this report- 39 William T. Coyle and wheat bran are the most commonly used in such a manner. Steam-flaked corn has become important in the last 5 years. MAF issued a regulation in 1976 permitting plants that specialized in simple feed production to import corn duty-free so long as it was denatured with soybean meal, fishmeal, or bran (such a combination is known as nishu- kon). Until then, imported corn that was not used in for- mula feed was restricted to some extent by a tariff quo- ta—primarily designed to protect Hokkaido potato farm- ers and the domestic potato starch industry (45, iv). Im- ports in excess of the quota were subject to a duty of ¥ 15,000 per ton in 1981. Next to concentrates, roughages are the most important sources of animal nutrition in Japan, but today they are much less important overall than they were 20 years ago. Japan’s limited amount of land precludes extensive cul- tivation in relatively low-value forage crops and pasture. Total pasture area in Japan, both permanent and annual (double cropped), quadrupled between 1960 and 1979 to almost 800,000 hectares, about 15 percent of the country's arable area (table 39). Harvested forage crop area, on the other hand, declined through the midseven- ties and has expanded only recently, spurred by strong Government encouragement. Expansion in area and new higher yielding seed lifted production to almost 9 million tons in 1979. Roughages are consumed primarily by ruminants and horses, whose total number has changed little since 1960. Dairy cattle inventories increased steadily over the period, but inventories of beef cattle, sheep, goats, and horses all declined. Expanded pasture and forage area, combined with a fairly constant number of grazing ani- mals, led to an increased supply of roughage per animal. The country’s 1979 forage and pasture area produced about 9.2 tons of roughage per grazing animal, close to half their annual nutrient needs.14 Other, less important, sources of domestic roughage are rice straw, potatoes, and beet pulp. Roughage imports are becoming increasingly important, particularly in supplying dairy herds outside of Hokkaido and northern Honshu. Imports of beet pulp, alfalfa meal '“This is based on the assumptions that the annual nutrient re- quirement for a grazing animal is 2,500 kg of TDN, and that the TDN content of green roughage (pasture and forage) is 12 per- cent. Japan’s limited land base precludes its raising much of its own livestock feed, like this corn in Ibaraki Prefec- ture. Imports account for about 70 percent of Japan’s feed supply; 60-70 percent of Japan’s coarse grain im ports come from the United States. 40 Feed and pellets, hay cubes, and baled hay are all under an au- tomatic approval system and are duty-free (tables 40 and 41). 15 Growth in trade has been rapid and is attributed to: the general shortage of land, reduced yields on diverted pad- dy land which is often marginal and relatively inaccessi- ble, and below normal yields in Hokkaido and northern Honshu because of periodic extreme winter weather (45, iii). '"Imports of baled hay have been restricted recently by plant quarantine regulations in order to prevent entry of Hessian fly pupae. Under the automatic approval (AA) system, licenses to import are issued freely by certain Government-authorized banks (46). Table 39— Grazing animals and land in pasture and forage, Japan A B C D E F Calendar year Grazing animal units Area in pasture Pasture production’ Area in forage and pasture Total forage and pasture production1 Yield A ~D~ E A Million head 2 1,000 ha Million mt 1,000 ha Million mt Metric ton/ha Animals per hectare Metric ton/head 1960 3,972 153 NA 476 NA NA3 8.3 NA 1961 3,936 183 4.1 508 NA NA 7.7 NA 1962 3,981 215 4.7 552 10.1 18.3 7.2 2.5 1963 4,038 249 6.0 564 10.9 19.3 7.2 2.7 1964 3,910 276 6.8 579 12.6 21.8 6.8 3.2 1965 3,550 303 8.3 596 14.3 24.0 6.0 4.0 1966 3,198 324 8.8 614 14.9 24.3 5.2 4.7 1967 3,203 356 11.3 629 17.6 28.0 5.1 5.5 1968 3,402 398 13.2 663 19.7 29.7 5.1 5.8 1969 3,674 435 14.8 682 21.3 31.2 5.4 5.8 1970 3,749 484 17.5 717 24.0 33.5 5.2 6.4 1971 3,758 557 18.6 734 24.7 33.7 5.1 6.6 1972 3,680 601 22.6 757 28.8 38.0 4.9 7.8 1973 3,693 643 23.2 803 28.9 36.0 4.6 7.8 1974 3,730 672 25.4 826 31.7 38.4 4.5 8.5 1975 3,699 691 25.4 840 31.7 37.7 4.4 8.6 1976 3,769 704 25.2 853 31.4 36.8 4.4 8.3 1977 3,915 723 27.5 876 34.7 39.6 4.5 8.9 1978 4,043 758 28.8 930 37.0 39.8 4.3 9.2 1979 4,180 774 29.0 953 38.0 39.9 4.4 9.1 1990 3 MAFF’s projections 6,4304'5 NA NA 1 ,5504 60.5 39. 06 4.1 9.4 ERS projections 1 5,6445'7 NA NA 1,283 50.0 39. 06 4.4 8.9 ERS projections II 6,3595'7 NA NA 1,445 56.4 39. 06 4.4 8.9 NA = Not available. 'Green basis. 2Horses and cattle equal 1 and sheep and goats equal 0.1. Swine and poultry are not included. 3For explanation of projections, see section titled “The Future of Japan’s Feed-Livestock Economy,” in this report. 4From The Long Term Prospects for the Demand and Supply of Agricultural Products, Government of Japan, November 1980. "Includes only cattle. "Average for 1975-79. 'Calculations are derived from production estimates in table 49. 41 Japan’s Feed-Livestock Economy Table 40— Japan’s imports of fodder and roughages, by commodity Calendar year Beet pulp Forage products Alfalfa meal and pellets Total 1,000 metric tons 1960 — 1961 — — — — 1962 20 — — 20 1963 12 — — 12 1964 5 — 154 159 1965 13 234 247 1966 27 — 313 340 1967 27 — 319 346 1968 92 2 318 412 1969 48 7 402 457 1970 8 482 490 1971 45 22 398 465 1972 51 59 437 547 1973 23 87 456 566 1974 52 130 384 566 1975 107 94 292 493 1976 267 172 326 265 1977 318 194 306 818 1978 417 254 324 995 1979 543 377 359 1,279 1980 579 392 306 1,277 1981 472 313 248 1,033 — = None or negligible. Source: Ministry of Finance, Japan Exports and Imports, annual issues. Government Policies Government policies are typically designed to control grain price fluctuation through state trading and stockpil- ing, supply/purchase agreements, diversification of sup- ply sources, and a price stabilization fund. Such policies are carried out through direct Government intervention as well as through collaborative arrangements with the pri- vate sector. State Trading. The Government’s Food Agency, by au- thority of the Stabilization Law for Demand and Supply of Feed (1953), directly controls the purchase, storage, and sale of wheat, barley, and rice. Although each of these grains was considered a staple food grain under the Food Control Act of 1942, they have also been used as feed- Table 41— Japan’s imports of fodder and roughages, by country of origin' Calendar year United States Canada China (PRC) Other Total 1,000 metric tons 1960 1961 — — — — — 1962 4 — — 16 20 1963 7 — — 5 12 1964 155 2 1 1 159 1965 238 2 6 1 247 1966 321 20 — — 340 1967 316 3 24 3 346 1968 360 — 25 27 412 1969 409 — 20 28 457 1970 457 15 1 17 490 1971 355 50 18 42 465 1972 404 58 13 72 547 1973 448 56 18 44 566 1974 379 98 22 67 566 1975 299 72 22 100 493 1976 401 121 39 204 765 1977 460 144 35 179 818 1978 652 180 20 143 995 1979 646 225 37 371 1,279 1980 981 172 43 81 1,277 1981 777 116 37 103 1,033 — = None or negligible. 'Includes alfalfa meal and pellets, beet pulp, and cubed and baled forage products. Source: Ministry of Finance, Japan Exports and Imports, an- nual issues. stuffs either on a continuing basis (wheat and barley) or from time to time (rice). The Food Agency controls the prices of these grains and their milling byproducts through its state trading function and is in a position to influence the price of simple and formula feeds to the extent that these grains and byprod- ucts are used. The Government’s influence in this area is diminishing because these food grains and their byprod- ucts are not used as much as they were before. Rice, wheat, barley and their byproducts made up 22 percent of formula and simple feeds in 1970 and 18 percent in 1979. An exception was the first surplus rice program (1971-73) which subsidized the feed use of rice and increased the Government’s control of feed prices. 42 Feed In terms of feed use, the most important of these staple grains is barley, which has been used consistently over the period. Most imported barley is used for feed, princi- pally as a finishing ration for beef and dairy cattle. It is often flaked or crushed and sold directly to livestock pro- ducers. A smaller amount is mixed into formula feed (table 42 and app. table 4). The Food Agency generally subsidizes the sale of feed barley as part of the Govern- ment’s policy to promote livestock production, particu- larly beef (45, vi). The Government has also controlled the feed use of whole wheat and wheat bran, again because of its man- date to control wheat as a food staple and close substi- tute to rice (table 43). The sale of whole wheat for feed ra- tions has never been very great because of its high cost; furthermore, if it is used as a primary ingredient in rumi- nant rations, its high starch content can cause digestive problems. Wheat bran, on the other hand, has been used more wide- ly. Since the late fifties, the Government has authorized and directed certain mills to produce wheat bran for live- stock feed, principally dairy (29, 42). The Zosan system, initiated in 1959, was designed to increase bran produc- tion as a byproduct at general mills by lowering the flour yield to between 40 and 45 percent (compared with a 75- 78 percent normal milling yield). The Senkan system, ini- tiated in 1958, authorized a small number of mills to prod- uce wheat bran as a primary product. The bran produced from these mills is higher in starch and lower in protein than regular wheat bran. The Government is able to direct the more effective use of lower grade wheat and encour- age the feeding of bran by subsidizing its price. The bran produced under the Zosan and Senkan systems is sold at a fixed Government price and marketed primarily through dairy associations. Rice occasionally has been used as a feed under the Gov- Table 42— Japan’s supply and distribution of barley Japan fiscal year Production Imports Exports Stock change Total utilization Feed Industrial use Seed and waste Gross food Net food Annual per capita consumption — 7 ,000 metric tons - Kilograms 1960 2,301 30 1 189 2,141 540 210 83 1,308 758 8.1 1961 1,976 — — -254 2,230 981 257 66 926 536 5.7 1962 1,726 — 1 -251 1,976 836 290 60 790 455 4.8 1963 759 414 1 -317 1,489 497 289 47 656 375 3.9 1964 1,202 580 — 64 1,718 648 355 44 671 364 3.7 1965 573 1,072 2 -42 1,685 862 507 19 297 163 1.5 1966 503 1,138 — - 105 1,746 898 517 17 314 171 1.5 1967 325 1,488 1 -30 1,842 982 583 12 256 136 1.3 1968 216 1,817 — -93 2,126 1,133 669 14 310 142 1.3 1969 233 2,038 — 139 2,132 1,129 699 14 290 128 1.1 1970 221 2,117 143 2,195 1,176 719 14 286 126 1.1 1971 210 2,258 — 215 2,253 1,238 732 13 270 120 1.1 1972 206 2,238 — 92 2,352 1,288 792 13 259 115 1.0 1973 326 2,052 — -2 2,380 1,325 855 14 186 83 .7 1974 407 2,132 — 77 2,462 1,420 864 16 162 74 .7 1975 221 2,117 143 2,195 1,176 719 14 286 126 1.1 1976 210 2,258 — 215 2,253 1,238 732 13 270 120 1.1 1977 206 2,238 — 92 2,352 1,288 792 13 259 115 1.0 1978 326 2,052 — -2 2,380 1,325 855 14 186 83 .7 1979 407 2,132 — 77 2,462 1,420 864 16 162 74 .7 1980 385 2,087 — -86 2,558 1,518 848 17 175 80 .7 — = None or negligible. Source: Ministry of Agriculture, Forestry, and Fisheries, Statistical Yearbook, annual issues. 43 William T. Coyle ernment’s surplus disposal programs, while its milling by- products (rice bran and rice bran oilcake) are used more consistently. During 1971-73, more than 3.5 million tons of surplus rice were sold to formula feed manufacturers. The feed price of rice was set consistent with the price of corn and sorghum in 1971 and 1972, and was set lower than the price of its substitutes in 1973, when world grain prices were rising rapidly. Stockpiling Policy. Stockpiling has been a part of the na- tion’s feed supply policy for some time. The Feedstuff Supply and Demand Stabilization Act of 1952 endorsed stockpiling as a means “to stabilize supply, demand, and prices of feedstuffs— ultimately to serve the promotion of the livestock industry.” The Government stockpiles, however, have been small in relation to annual feed con- sumption. Rapid increases in commodity prices and uncertainty about future grain supplies in the early seventies led to a new Government program to increase Government-held stocks of barley, and to subsidize the expansion of pri- vately held stocks of corn and sorghum. The target for 1980, set forth in 1976, to expand barley stocks by 450,000 tons and corn and sorghum stocks by 500,000 tons, was largely achieved. Feed barley reserves were drawn down beginning in 1979 because of large surplus rice stocks that could be converted to feed. By the end of 1980, barley stocks under the program were 277,000 tons and corn and sorghum stocks totaled about the prescribed 500,000 tons (45, v and vi). Government feed grain reserves are ex- pected to expand to a total of 1.3 million tons by 1983- still less than a month’s supply. Other stockpiling ideas have been proposed but not im- plemented. Stockpiling grains in the United States was considered, but the lower storage and construction costs were outweighed by technical and legal problems. The use of surplus bulk carriers as floating grain storage facilities was also studied but never realized. Table 43— Japan’s supply and distribution of wheat Japan Seed Annual fiscal Stock Total Industrial and Gross Net per capita year Production Imports Exports change utilization Feed use waste food food consumption 1,000 metric tons Kilograms 1960 1,531 2,660 47 179 3,965 468 235 137 3,125 2,406 25.8 1961 1,781 2,660 71 180 4,190 616 225 142 3,207 2,437 25.8 1962 1,631 2,490 93 -244 4,272 646 233 139 3,254 2,473 26.0 1963 716 3,412 73 -235 4,290 520 230 136 3,404 2,587 26.9 1964 1,244 3,471 68 142 4,505 534 240 138 3,593 2,731 28.1 1965 1,287 3,532 88 100 4,631 530 261 140 3,700 2,849 29.0 1966 1,024 4,103 79 65 4,983 543 269 146 4,025 3,099 31.3 1967 997 4,238 87 42 5,106 592 257 151 4,106 3,162 31.5 1968 1,012 3,996 114 - 198 5,092 567 257 149 4,119 3,172 31.3 1969 758 4,537 81 -31 5,245 667 264 146 4,168 3,209 31.3 1970 474 4,621 47 - 159 5,207 701 276 136 4,092 3,192 30.8 1971 440 4,726 55 -95 5,206 632 267 138 4,169 3,252 31.0 1972 284 5,269 57 173 5,323 707 272 136 4,028 3,282 30.9 1973 202 5,369 38 35 5,498 708 335 139 4,316 3,366 31.0 1974 232 5,485 26 174 5,517 619 354 144 4,409 3,439 31.2 1975 241 5,715 34 344 5,578 390 317 149 4,522 3,527 31.5 1976 222 5,545 44 63 5,660 576 332 150 4,602 3,590 31.7 1977 236 5,662 4 133 5,761 637 315 154 4,655 3,631 31.8 1978 367 5,679 2 183 5,861 669 352 159 4,681 3,651 31.7 1979 541 5,544 4 61 6,020 683 420 168 4,749 3,704 31.9 1980 583 5,564 5 88 6,054 647 390 178 4,839 3,774 32.2 Source: Ministry of Agriculture, Forestry, and Fisheries, Statistical Yearbook, annual issues. 44 Feed Feed Price Stabilization Fund. In 1975, before the stock- piling program was undertaken, the Government set up a semiprivate agency, the Mixed Feed Supply and Sta- bilization Organization (MFSSO), to administer a feed price stabilization program designed to reduce short-term fluctuations (over a period of months) in feed prices paid by livestock producers. The MFSSO’s fund was the fourth of its kind, but the first involving Government participa- tion. The other funds were those established by Zennoh in 1968, other cooperatives such as Zen-rakuren (the Na- tional Federation of Dairy Cooperative Associations^ in 1968, and the Japan Feed Manufacturers Association in 1973. Government participation in the fund involves an annual contribution to the MFSSO. The three privately organized funds are requested to reserve an equivalent amount in addition to their own stabilization funds. (Contributions to the Government’s parent fund are based on each or- ganization's share of the mixed feed market). Producers, feed manufacturers, and, in some cases, Prefectural co- operative organizations pay a tax into the fund based on their volume of business. The MFSSO fund is linked di- rectly with the three industry funds so that accumulated reserve funds can be made available to subscribers when needed. The industry funds are paid out during times of minor price fluctuations while the Government-sub- sidized fund is used under more adverse conditions. In 1978, the accumulated Government fund represented about 6 percent of producer feed costs that year. Supply-Purchase Agreements. Since Japan imports much of its annual feed requirements, stabilizing the import supply has been an important Government objective in its efforts to sustain and promote the country’s livestock in- dustry. Stable feed grain imports have also been linked to the notion of food security. Supply stability has been achieved at least in part through bilateral supply-purchase agreements or under- standings. The most important of these was the Butz-Abe understanding of 1975-78 regarding trade in grain and soybeans. Other informal purchase arrangements have been made with Canada and Australia for trade in barley and wheat (tables 44-46). The Butz-Abe understanding grew out of a meeting on August 12, 1975, between the U.S. Secretary of Agri- culture and the Japanese Minister of Agriculture and For- estry. The details of the understanding were specified in a USDA letter written on November 7 to the Japanese Minister, outlining “trade targets for the coming three years for grains and soybeans.” In the letter, the United States agreed to supply Japan with certain minimum levels of grain and soybeans as discussed during the meeting in August. The approximate annual amounts specified were 3 million tons of wheat, 3 million tons of soybeans, and 8 million tons of feed grain. The Japanese also suggested an annual review of the quantity targets. At least two developments in the early seventies moti- vated this arrangement. First, as a result of worldwide shortfalls in grain production in 1972, U.S. wheat exports increased by 80 percent, and corn exports increased by 50 percent over the previous year, with especially large volumes going to the Soviet Union and its satellites. This represented a shift in the pattern as well as the amount of U.S. trade. Until 1972, U.S. agricultural exports to the cen- trally planned economies, with the exception of Eastern European countries, were negligible. The Soviet Union, which was 42nd as a market for U.S. wheat in 1971, rose to first in 1972 and again in 1973. The situation was simi- lar for coarse grains. The Soviet Union purchased no coarse grains from the United States in 1970 and became the second most important market in 1972 and 1973. Ja- pan, on the other hand, had been a stable market for U.S. agricultural commodities, purchasing large quantities of feed grains, wheat, and soybeans for many years. The soybean embargo in 1973 was the second precursor to the Butz-Abe understanding. Soybeans were in short supply in 1973. As an inflation-fighting measure, the U.S. Secretary of Commerce imposed an embargo on the ex- port of soybeans, cottonseed, and meal and oil products from these commodities on June 27, 1973. The embargo was lifted on July 2 at which time a licensing procedure was administered that limited the exports of those com- modities until all controls were lifted on September 21. The soybean embargo and the tripling of oil prices in 1973 are still mentioned as the two most important shocks to the Japanese economy during the early seventies. While the tripling of oil prices had a real and lasting effect on the Japanese economy, the effect of the soybean em- bargo was largely psychological. The embargo was viewed as a symbol of Japan’s vulnerability to discon- tinuities in agricultural trade resulting from policies in major exporting countries, despite the fact that Japan was able to import a record volume of soybeans from the United States in 1973. Since the Butz-Abe understanding expired in 1978, no similar arrangement has replaced it. The Carter-Ohira communique of May 1979 called for annual U.S. -Japan ag- ricultural meetings which have taken place in November 1979, December 1980, October 1981, and September 1982. There was speculation that the second meeting would lead to a long-term supply-purchase agreement on grains and oilseeds similar to the above-mentioned Butz-Abe 45 Japan’s Feed-Livestock Economy understanding. The Nihon Keizai Simbun in November 1980 hinted at the possibility “that Japan [would] seek a revival of the past Japan-U.S. agreement on long-term grain transactions when the two nations hold their reg- ular farm product talks in Washington in early December.” The House Ways and Means subcommittee on trade in its September 1980 United States-Japan Trade Report similarly suggested that "the U.S. consider the possibility of offering the Japanese an extremely long- term commitment for the right and obligation to pur- chase, at current market prices, set quantities of various foods. Such a commitment would help reduce Japan's concern about sources of food supply and about the need for costly new programs to increase domestic self- sufficiency.” But no agreement emerged. Instead, the talks centered on the exchange of information, particularly that relating to the current supply/demand situation for major com- modities in both countries and in the rest of the world, as well as the likely direction of each country's agricultural policy in the eighties. References were made to the tradi- tional concerns of both sides. The Japanese emphasized their extreme dependence on agricultural imports, con- cern over the current tightness of grain and soybean sup- plies and rising commodity prices, and apprehension over the possible recurrence of an embargo like the one in 1973 that stopped U.S. exports of soybeans for about a week. The U.S. delegation assured the Japanese that ade- quate and fairly priced supplies would continue and that the United States would continue to stabilize world com- modity markets through its farmer-owned reserve system, agreements with unpredictable markets such as the So- viet Union and China, and its commitment to production adjustments via the market; the delegation also noted, however, that real commodity prices were apt to rise Table 44— Japan’s imports of coarse grains by country of origin1 Calendar year United States Canada Australia Argentina Thailand South Africa Other Total 1,000 metric tons 1960 229 2 2 428 314 254 175 1,404 1961 763 18 4 286 460 446 123 2,100 1962 1,429 5 17 53 237 868 119 2,728 1963 1,922 39 12 93 429 779 318 3,592 1964 2,620 84 123 238 726 626 327 4,744 1965 3,859 245 175 206 596 30 517 5,628 1966 4,505 209 72 198 825 — 584 6,393 1967 3,965 394 213 195 736 742 1,044 7,289 1968 4,441 298 160 90 652 1,591 962 8,194 1969 5,383 81 266 1,052 478 667 1,244 9,171 1970 6,588 622 513 1,757 562 399 385 10,826 1971 4,261 767 1,492 1,368 895 734 552 10,069 1972 5,455 836 1,277 596 884 1,360 566 10,974 1973 9,461 990 788 584 404 605 322 13,154 1974 9,096 741 1,517 816 959 416 528 14,073 1975 7,381 1,032 1,558 867 818 1,037 413 13,106 1976 8,585 1,004 1,722 1,107 995 892 311 14,616 1977 10,003 1,031 1,474 2,408 495 795 131 16,337 1978 11,019 844 921 2,512 403 1,417 281 17,397 1979 12,151 939 1,428 2,480 515 959 178 18,650 1980 15,636 703 1,108 98 230 913 19 18,707 1981 15,296 941 880 58 5 1,444 15 18,639 — = None or negligible. 'Includes corn, sorghum, barley, oats, rye, and millet. Source: Ministry of Finance, Japan Exports and Imports, annual issues. 46 Feed along with rising input prices. The U.S. delegation also noted that the U.S. embargo of Soviet grain shipments was not casually implemented but was an action taken in response to “naked armed intervention.” But Japan’s needs were less urgent than in the early and midseventies. The Japanese felt that a new agreement could have had an adverse short-term effect on prices, forcing them even higher than they already were. Further- more, Japan desired to keep its options open as its agri- culture was entering a period of transition and adjust- ment with slower growth in the livestock sector. Diversification of Supply. The Japanese Government’s ef- forts to diversify its sources of supply predate the 1972-73 period of tight grain supplies. They appear to have had only a slight effect, if any, in reducing de- pendence on the United States. Long-term interest-free Government loans were initially extended in the middle and late sixties to Japanese trading companies to pro- mote production of corn and sorghum in Indonesia, Thai- land, and Cambodia (45, i). Other investments were made in Australia and Brazil. In general, the returns on these projects were not very good because of poor soil condi- tions, insect damage, low productivity, and the small scale of the operations.16 Despite these efforts at import diversification, the United States maintained a fairly con- stant share of Japan’s coarse grain imports during 1965- 79, falling below 50 percent only twice (1971 and 1972). Major Japanese trading companies shifted their policy in the late seventies away from agricultural production in '6Nihon Nogyo Simbun (newspaper), August 6, 1980. Table 45— Japan’s imports of coarse grains Calendar year Corn Sorghum Barley Oats Rye Millet Total 1,000 metric tons 1960 1,354 45 2 3 1,404 1961 1,831 146 — 4 119 — 2,100 1962 2,316 400 — 4 7 1 2,728 1963 2,645 750 172 5 8 12 3,592 1964 3,229 953 471 10 4 77 4,744 1965 3,434 1,431 635 13 46 69 5,628 1966 3,598 2,247 447 12 74 15 6,393 1967 3,960 2,584 603 21 101 20 7,289 1968 5,144 2,314 634 24 66 12 8,194 1969 5,489 2,859 677 86 28 32 9,171 1970 6,018 3,789 768 135 73 43 10,826 1971 5,007 3,811 865 197 160 29 10,069 1972 6,052 3,505 1,004 204 170 39 10,974 1973 7,771 3,742 1,322 110 151 57 13,153 1974 7,940 4,474 1,418 169 28 44 14,073 1975 7,470 3,794 1,598 141 54 49 13,106 1976 8,383 4,227 1,756 150 39 55 14,610 1977 9,068 5,181 1,735 169 141 43 16,337 1978 10,534 5,112 1,490 143 60 58 17,397 1979 11,407 5,355 1,519 207 98 64 18,650 1980 12,830 4,219 1,416 177 18 47 18,707 1981 13,590 3,301 1,568 114 18 48 18,639 — = Less than 500 tons. Source: Ministry of Finance, Japan Exports and Imports, an- nual issues. Table 46 —Japan’s imports of oilseeds Calendar year Soybeans Rapeseed Cottonseed Sesame Copra 1,000 metric tons 1961 1,158 24 100 22 80 1962 1,293 42 150 28 88 1963 1,544 94 168 33 108 1964 1,607 82 205 34 86 1965 1,847 108 217 33 94 1966 2,168 218 266 38 108 1967 2,170 222 216 40 112 1968 2,421 257 246 39 126 1969 2,591 292 244 34 109 1970 3,244 345 297 53 127 1971 3,212 416 248 41 122 1972 3,396 614 180 51 124 1973 3,634 693 159 56 174 1974 3,244 679 123 50 86 1975 3,334 668 116 39 90 1976 3,554 726 95 52 111 1977 3,602 776 95 55 98 1978 4,260 832 92 54 90 1979 4,132 1,129 72 63 56 1980 4,401 1,067 91 63 65 1981 4,197 1,169 66 59 74 — = Less than 500 tons. Source: Ministry of Finance, Japan Exports and Imports, an- nual issues. 47 William T. Coyle developing countries toward greater investment in the U.S. grain trade through the purchase of grain storage and handling facilities. Trade Liberalization. Trade liberalization measures have facilitated imports of some feedstuffs and reduced costs to formula feed mills and livestock producers. There are still feedstuffs that are protected, mainly dairy products like nonfat dry milk and whey, and grains like barley and wheat, which are considered staples. Other protected feedstuffs are oats, fishmeal, and corn imported by non- bonded mills. Most other feedstuffs, including rough- ages, are under an automatic approval system and have a small tariff or none at all. Japan's feed grain market is much less protected now than it was 20 years ago, when the country was trying to stem the outflow of foreign exchange. In the early sixties, such feedstuffs as sorghum, soybean meal, rapeseed meal, and molasses were under a foreign fund allocation system limiting imports on a value basis. In 1964, import restrictions on sorghum for feed were liberalized and sor- ghum rapidly became the second most important ingre- dient in formula feed. Demand for a greater variety of food and a desire to move toward freer trade under the General Agreement on Tar- iffs and Trade (GATT) reduced the number of Japan's im- port quotas from 118 to 33 between 1968 and 1971 (23). Many of the eliminated quotas had applied to agricultural items, including soybean meal. There are currently 27 im- port quota items, 22 of which are agricultural and marine products, but nonfat dry milk, whey, and food grains (rice, wheat, and barley) are the only feedstuffs so controlled. The Customs Tariff Act of 1968 reduced or eliminated tar- iffs on raw materials for compound feed including corn, sorghum, soybean meal, nonfat dry milk, blood meal, rye, oats, beef tallow, molasses, and manioc. Concessions re- sulting from the Tokyo Round of Multilateral Trade Ne- gotiations (MTN) bound the zero duties on feather meal and soybeans in 1978. Increased Domestic Production of Feedstuffs. The Gov- ernment has encouraged increased domestic production of feed grains and roughages through incentives to ex- pand area and to use improved seeds. Expansion of the area planted to feed and forage crops was subsidized under all three of the Government’s rice diversion pro- grams in the seventies. Farmers receive large incentive payments for planting feed crops on rice paddy area. They are also paid for double-cropping a feed crop with rice or for switching upland fields to an annual, perennial, sum- mer, or winter feed crop. At a number of Government research centers, forage seeds more suited to Japan’s climate are being devel- oped. Such seeds are often sent for multiplication over- seas where land is more plentiful and cheaper. The Future of Japan’s Feed-Livestock Economy If the past is prologue to the future, then the preceding sections should serve as a basis for a look at the future of Japan’s livestock industry and its feed requirements. Many simplifying assumptions were used to make an oth- erwise complicated task more comprehensible. I have in- cluded alternative projections of 1990 consumption, pro- duction, and trade of livestock products— one set of pro- jections made by MAFF, two sets made by me. Finally, feed demand is projected using estimates of livestock production and feed conversion rates. Future growth in Japanese consumption of livestock products will depend primarily on income and population growth, changes in prices, and Government policy. Real personal expenditures are expected to increase at a more moderate rate in the eighties than in the past, especially before 1972. An annual growth rate of about 4.5 percent is likely. Population growth slowed from 1.4 percent per year during 1970-75 to 0.9 percent in 1975-79. A rate of 0.8 percent should persist through the eighties (table 47). Per capita personal consumption expenditures should, there- fore, grow by about 3.7 percent per year through 1990. 17 Total Japanese consumption of livestock products will be stimulated by increases in both population and real in- come. The extent to which consumers increase their ex- penditures on livestock products will depend on how they respond to increases in real income. Measures of income elasticities of demand for livestock products with respect to income per capita have varied considerably from study to study. In table 48, three alternative sets of projections of the demand for livestock products and fish in 1990 are compared. The first set shows official Japanese (MAFF) projections published in November 1980. The second set (ERS projections I) contains projections based on income elasticity measures considered to be more likely than the ones implicit in the MAFF projections. The last set (ERS projections II) is based on the same assumptions as ERS projections I, except that per capita fish consumption re- mains unchanged through 1990, while the loss of protein from fish is made up from other livestock products so as to achieve the same animal protein intake level as in ERS projections I. Relative prices and government policies are assumed to remain constant through the period. ,7These assumptions are taken from MAFF’s The Long-Term Prospects for the Demand and Supply of Agricultural Products, Nov. 1980. 48 Projections Table 47— Japan: Demand indicators Item 1960-65 1965-70 1970-75 1975-79 1960-79 1980-90’ Population 1.0 1.3 Annual percent change 1.4 0.9 1.1 0.8 Real GNP 9.7 11.6 5.1 5.8 8.0 NA Real private consumption expenditures: Total 8.9 9.2 6.0 4.8 7.4 4.5 Per capita 7.8 7.9 4.5 3.9 6.2 3.7 NA = Not available. 'Projected; taken from MAFF’s The Long-Term Prospects for the Demand and Supply of Agricultural Products, Nov. 1980. Table 48- —Japan: Alternative projections of demand for livestock products and fish, 1990 MAFF’s 1990 projections' ERS projections 1 ERS projections II 1978 consumption Implied demand Consumption Implied demand Consumption Implied demand Consumption Item Total2 Per capita elastic- ities Total Per capita elastic- ities Total Per capita elastic- ities Total Per capita 1,000 mt Kg 1,000 mt Kg 1,000 mt Kg 1,000 mt Kg Total meats 3,470 20.8 0.6 4,930 27.0 1.1 6,245 34.2 1.4 7,049 38.6 Beef and veal 560 3.3 .9 890 4.8 1.4 1,130 6.1 1.7 1,278 6.9 Pork 1,470 8.7 .6 2,030 11.1 1.1 2,613 14.1 1.4 2,928 15.8 Poultry 1,090 7.1 .6 1,510 9.1 1.1 1,932 11.5 1.4 2,184 13.0 Dairy products 7,010 59.3 .5 9,495 73.0 .7 10,483 80.7 1.0 11,821 91.0 Eggs 2,040 14.9 0 2,250 15.0 .2 2,430 16.2 .5 2,730 18.2 Fish 4,094 35.5 .3 5,040 40.0 .4 Grams 5,342 42.4 0 4,473 35.5 Per capita daily food supply: Protein intake * 81 * * 84 * * 84 * * 84 From livestock products * 21 * * 25 * * 30 * * 33 From fish 18 * 20 Calories 22 18 Calorie intake * 2,505 * * 2,500 * * 2,500 * * 2,500 From livestock products * 294 * * 356 * * 419 * * 473 From fish 107 121 128 107 * = Not applicable. 'Projections published in MAFF’s The Long-Term Prospects for the Demand and Supply of Agricultural Products, Nov. 1980. 2Derived from per capita consumption and population levels (115 million in 1978 and 126 million in 1990) and a constant percentage used to convert net food to total gross consumption (0.68 for beef, 0.68 for pork, 0.75 for chicken, 0.97 for dairy, 0.84 for eggs, and 0.37 for fish). 49 Japan’s Feed-Livestock Economy According to official MAFF projections, per capita caloric intake will remain constant between 1980 and 1990, and protein intake will increase by 4 percent. Per capita meat consumption will increase by 15 percent. The income elas- ticities implied by these projections, particularly those for meats, appear too low.’8 The only elasticities that are in line with recent estimates are those for eggs, dairy prod- ucts, and fish. ERS projections I draw on research by Kester (30), Lopez (36), and others (38). The income elasticity measures used ,8MAFF’s projections for 1985, published in 1975, also seem to underestimate the income elasticity of demand for meats (42, p. 34). to project meat consumption are nearly twice those used in MAFF’s calculations, implying a level of meat con- sumption about 1 million tons greater than MAFF’s. An- nual per capita meat consumption is projected to reach 34 kilos in 1990, more than 50 percent greater than in 1978 and substantially higher than MAFF’s forecast of 27 kilos (table 48). Even at 34 kilos, Japanese consumption would be well below levels in other developed countries, even for such Asian neighbors as Hong Kong and Singapore. The ERS projections II are the same as the ERS projec- tions I, except for assumptions related to fish consump- tion. Fish have been central to the Japanese diet for cen- turies. In the past 20 years, despite unprecedented Table 49— Japan: Production and self-sufficiency rates for major livestock products Self-sufficiency Production Item 1960 1965 1970 1975 1976 1977 1978 1978 Percent 1,000 mt Beef and veal 95.9 94.5 88.9 80.3 68.7 74.6 73.2 406 Pork 96.1 100.0 97.6 84.2 86.4 86.6 90.1 1,323 Chicken 100.0 96.2 97.7 96.8 95.6 96.0 94.2 1,022 Dairy products 76.4 85.7 89.4 81.8 84.8 87.5 89.3 6,261 Eggs 101.3 99.8 97.4 97.0 97.3 97.0 97.2 1,980 Fish 109.6 100.4 101.9 99.2 98.9 97.5 95.3 10,335 MAFF’s 1990 projections’ ERS projections I2 (1990) ERS projections II2 (1990) Item Self- sufficiency Production Self- sufficiency Production Self- sufficiency Projection Percent 1,000 mt Percent 1,000 mt Percent 1,000 mt Beef and veal 70.7 630 46.8 529 46.6 596 Pork 95.6 1,940 95.6 2,498 95.6 2,799 Chicken 96.7 1,490 96.7 1,868 96.7 2,112 Dairy products 88.7 8420 88.7 9,298 88.7 10,485 Eggs 98.7 2,220 98.7 2,398 98.7 2,695 Fish 80.0 11,100 97.7 14,100 91.8 11,100 ’Projections published in MAFF’s The Long-Term Prospects for Demand and Supply of Agricultural Products, Nov. 1980. derived from alternative demand projections I and II and applying MAFF’s self-sufficiency rates for all livestock except beef. Source: Food balance sheets. 50 Projections income growth, per capita fish consumption remained fairly constant, growing at an annual rate of only 1 per- cent compared with 8 percent for meat. Over the 1975-79 period, average annual per capita fish consumption de- clined. If we assume that per capita fish consumption through 1990 will remain unchanged, then per capita fish consumption will be below levels projected by MAFF and in the ERS projections I. To maintain animal protein in- take at levels projected in the ERS projections I, 6.9 kilos less of fish consumption per person per year would have to be made up by increased consumption of livestock products. In the ERS projections II, the protein deficit resulting from less fish consumption is made up by in- creasing the consumption of every other livestock prod- uct by about 13 percent. This would raise total per capita meat consumption to 38.6 kilos for 1990. Livestock Sector Three sets of production projections are made that close- ly parallel the demand projections: the official MAFF ones as well as two alternatives closely associated with the ERS consumption projections I and II. The MAFF 1990 production projections imply self-suffi- ciency rates of 71 percent for beef, 96 for pork, 97 for chicken, 89 for dairy, and 99 for eggs, which are consis- tent with the historical record. In all cases except beef, the same rates are used in deriving production and net trade from the ERS consumption projections I and II (table 49). For beef, self-sufficiency rates of about 47 per- cent are derived from the assumption that, in future years, beef production will be closely tied to milk produc- tion, a function of yield per cow and number of cows. Milk production in 1990 would, therefore, imply a certain dairy herd size, which in turn would imply a certain cull rate for older cows and standing inventory of dairy steers and re- placement heifers. The slaughter rate of culls and steers and their average weights would give us an estimate of dairy beef production for that year. Total beef production would depend on dairy beef’s share, which, in recent years, has ranged from 60 to 70 percent. For 1990, I as- sume that 65 percent of total beef will come from dairy animals— a reasonable assumption given the inefficien- cies in the Wagyu Sector, its iack of growth, and the unlikelihood of greater Government protection.19 19The following assumptions, based on 1975-79 values, are made about the relationship of milk and beef production in 1990: 1) milk yields will be 6.1 tons per milk cow, 2) milk cows will represent 40 percent of the dairy herd, 3) dairy steers and culled cows will represent 22 percent and 8-9 percent, respectively, of the dairy herd, 4) slaughter rates for dairy steers and culls will be 60 and 170 percent, respectively, 5) average slaughter weights for dairy steers and culls on a carcass basis will be 340 kg and 310 kg, respectively, and 6) beef from dairy steers and culls will represent 65 percent of total beef supply. Beef will become very much a byproduct of milk produc- tion. Since under both the ERS projections I and II the de- mand for milk is expected to grow less than the demand for beef, the gap between production and consumption of beef is expected to widen. Consequently, beef imports will grow. The MAFF 1990 self-sufficiency rates for pork, chicken, and eggs, which are all slightly higher than 1975-79 aver- age rates, are reasonable, since these industries are rel- atively more competitive against imports, use little land, and will become more competitive with further structural changes in the eighties. These MAFF self-sufficiency rates, therefore, are applied to the ERS consumption pro- jections I and II. The import market for these products will vary from year to year but will shrink over the decade (table 50). Fisheries The future of Japan’s fish supply is uncertain. Develop- ments in recent years point to a tight supply situation for both Japan and the rest of the world at least over the next decade. Japan’s fish catch could grow by as much as 2.5 Table 50— Japan: Projections of production, consumption, and trade of livestock products’ 1985 1990 Item 1980 1 II 1 II 1,000 metric tons Beef and veal: Production 418 471 499 529 596 Consumption 580 810 860 1,130 1,278 Net imports 174 339 361 601 682 Pork: Production 1,476 1,920 2,032 2,498 2,799 Consumption 1,677 2,090 2,213 2,613 2,928 Net imports 155 170 181 115 129 Chicken: Production 1,145 1,462 1,555 1,868 2,112 Consumption 1,222 1,537 1,634 1,932 2,184 Net imports 72 75 79 64 72 Eggs: Production 1,999 2,189 2,321 2,398 2,695 Consumption 2,066 2,241 2,375 2,430 2,730 Net imports 67 52 54 32 35 Milk: Production 6,501 7,775 8,256 9,298 10,485 Consumption 7,561 8,903 9,454 10,483 11,821 Net imports 1,026 1,128 1,198 1,185 1,336 'ERS projections I and II from tables 47 and 48. 51 William T. Coyle percent per year, attaining a level of 14.1 million metric tons by 1990. Attaining such a volume, however, depends on the country's ability to develop its coastal resources to offset the effects of industrial pollution, and to main- tain its catch in distant fisheries. Marine aquaculture now accounts for about 900,000 metric tons per year, about 8 percent of the total catch. Growth in aquaculture has been rapid, but the upper limit is probably in the neighborhood of 2.5 million metric tons.20 Based on the growth trend since 1975, 1990 production will reach 1.2 million metric tons. Coastal and offshore resources will continue to provide the greatest part of the country’s future catch. Growth in the offshore catch was very rapid during the seventies, offsetting the decline in distant fisheries. If both the coastal and offshore catch grow at the 1975-79 trend rate, 1990 production from these areas will reach 10.9 million metric tons (offshore, 8.84 million metric tons; coastal, 2.03 million metric tons). The most uncertain source will be Japan’s traditional dis- tant fisheries. Some new areas will probably be devel- oped and become commercially important, but foreign control over them will make Japan’s access and catch un- predictable. An unlikely political breakthrough on the Northern Territories would open up a vast area rich in resources and in close proximity to Japan. At any rate, distant fisheries should continue to provide Japan with at least 2 million metric tons through 1990. The uncertainty of the fish catch makes Japan’s self-suf- ficiency in fish equally uncertain. MAFF projects a 1990 fish catch of about the same as 1978, with a sharp in- crease in imports to meet demand. If the past few years are viewed as an adjustment period, and if the total ocean yield can grow, as projected by a number of researchers (7, p. 231), there is no reason why the sophisticated Jap- anese fishing industry cannot catch 14.1 million metric tons of fish by 1990. A reclassification of marine life here- tofore considered inedible (such as krill) is a likely possi- bility and would help in attaining such a level. Feed Supply Future Japanese sources of animal nutrition will be prin- cipally imported concentrates, supplemented by domes- tic pasture and forage products. Future feed demand will 20Cultured fishing “could produce as much as 10 to 20 metric tons per one km2 of available sea area that could thus be utilized’’ (50, p. 282). depend on future livestock production. To the previously discussed projections of livestock product supplies, we can apply estimated grain and protein meal conversion rates to project a consistent level of grain and protein meal demand. The ensuing discussion focuses on feed grain and protein meal demand because they will repre- sent about two-thirds of total feed supply (TDN) by 1990, and because most of it will be imported. Grain/product conversion rates are projected to 1985 and 1990 for five livestock categories (table 51), using 1975-79 rates as a baseline, and assuming that pasture area and forage crop production grow in proportion to cattle inventories. The conversion rates are expected to fall for chicken, egg, and milk production. This is consistent with likely structural Table 51— Japan: Feed conversion rates for livestock products Item 1970 1975 1980 1985 1990 Kg feed/kg products Beef and veal:' Total concentrates2 4.18 5.61 8.08 9.98 11.68 Grain 2.84 3.99 5.72 7.15 8.41 Protein meal3 .44 .33 .56 .69 .81 Pork: Total concentrates 5.36 4.36 4.34 4.63 4.59 Grain 3.35 3.00 3.17 3.47 3.44 Protein meal .94 .83 .86 .92 .91 Chicken: Total concentrates 2.07 3.13 2.90 2.91 2.78 Grain 2.02 2.06 1.99 2.03 2.01 Protein meal .66 .70 .63 .63 .60 Eggs: Total concentrates 4.00 3.65 3.68 3.42 3.30 Grain 2.63 2.41 2.52 2.33 2.26 Protein meal .85 .82 .81 .75 .73 Milk: Total concentrates .42 .44 .43 .42 .40 Grain .17 .20 .21 .22 .23 Protein meal .09 .08 .07 .07 .07 'Substantial beef comes from culled dairy cows. Some dairy feed is, therefore, converted to beef. includes formula and simple feeds. 3Protein meal includes rice bran oilcake, soybean meal, other vegetable oilcakes, fishmeal, fish solubles, nonfat dry milk, and other animal meals (e.g., feather and blood meal). Rates include only protein meal used in formula feed and are computed on a soybean meal equivalent basis. Sources: Shiryo Geppo (Feed Monthly) and The Meat Statistics of Japan. 52 Projections Table 52— Japan: Projected grain demand in 1990 Livestock MAFF projections’ ERS projections I3 ERS projections II3 Item production in 1980 Grain demand Livestock production Grain demand Livestock 2 production Grain demand2 Livestock production Grain demand2 Beef and veal 418 2,391 630 1,000 metric tons 5,298 529 4,449 596 5,012 Pork 1,476 4,679 1,940 6,674 2,498 8,593 2,799 9,629 Chicken 1,145 2,279 1,460 2,935 1,868 3,755 2,112 4,145 Eggs 1,999 5,037 2,220 5,017 2,398 5,419 2,695 6,091 Dairy products 6,502 1,365 8,420 1,937 9,298 2,139 10,485 2,412 Total grain demand" * 15,751 * 21,861 * 24,355 * 27,389 Average annual increment, 1980-90 * * * 611 Percent 860 * 1,164 Average annual growth rate, 1980-90 * 3.3 4.5 5.7 * = Not applicable. 'Based on MAFF’s The Long-Term Prospects for the Demand and Supply of Agricultural Products, released by the Government of Japan, November 1980. 2Computed using projections of livestock production from table 49 and 1990 grain/product rates from table 51. 3See table 48 on consumption alternatives. Production is derived from consumption by using the Government’s self-sufficiency targets in all cases except beef. "Includes only five main categories of livestock. There are other miscellaneous categories such as pet, fish, and horse feeds. change in these industries and improvement in feed con- version efficiency. The rates for beef and pork, on the other hand, are expected to increase, which is consistent with a probable trend toward increased commercializa- tion and confined feeding practices. Depending on the production projections used, total feed grain demand is expected to increase at an annual rate between 3.3 and 5.7 percent, or 0.6 to 1.2 million metric tons per year. These rates are below 1975-80 averages but somewhat above those of the 1970-75 recessionary period (table 52). Most of the future demand for grain and other concen- trates will be fulfilled by imports (table 53). Domestic grain production will be primarily limited to rice, wheat, and barley. Production of a feed-quality rice is under dis- cussion but will probably be prohibitively expensive (the Government subsidy will have to be much larger to sell rice as a feed than as a food staple). Protein meal rates are projected to remain fairly constant over the next decade. In most cases, this will mean that rations will have a somewhat higher proportion of protein meal by 1990. By applying protein meal conversion rates to projected levels of production (table 49), we see that protein meal demand growth will approximately parallel that of feed grain demand, that is, between 3.8 and 5.0 per- cent per year, or 193,000 to 270,000 metric tons per year (table 54). Table 53— Japan: Projections for coarse grains 1985 1990 ERS projections ERS projections Item 1980 I II I II 1,000 metric tons Domestic production' 400 474 474 577 577 Total con- sumption 19,197 24,089 25,307 29,659 32,762 Industrial uses2 3,086 3,827 3,827 4,747 4,747 Major live- stock feeds3 15,751 19,809 21,000 24,355 27,389 Other feeds" 360 453 480 557 626 Imports 18,863 23,615 24,833 29,082 32,185 Exports — — — — — — = None or negligible. 'Based on MAFF’s The Long-Term Prospects for the Demand and Supply of Agricultural Products, November 1980. “Principally for the manufacture of corn syrup and starches. Projected to increase at 4.4 percent per year through 1990. 3Computed from data in tables 50 and 51. "Includes pet, horse, fish, and other animal feeds. 53 Japan’s Feed-Livestock Economy As in the case of grain, much of the protein meal supplies will come from imported material, mainly soybeans. At present, Japan produces soybeans, rapeseed, and pea- nuts, much of which is used directly for human consump- tion. On the other hand, Japan’s fishmeal production has been an important feedstuff in the past, but will likely diminish in importance with rising fish prices and a likely tendency to make more efficient use of marine resources for food (table 55). The extent to which Japan relies on imports of oilseeds or meals over the next decade will depend on relative condi- tions of the oil and meal markets. The derived demand for meal as a livestock feed is expected to increase more rap- idly than demand for oil as a food. Uncertainty and the ex- pected imbalance in demand growth for meal and oil will make Japanese crushers reluctant to expand capacity (unless they can count on export markets) and formula feed producers more dependent on imports of protein meal. There will also be a tendency for crushers to shift toward use of oilseeds with higher meal content (like soy- beans, with 78-percent meal content compared with 60-65 percent for rapeseed). Figure 3 Imports of Coarse Grains by Japan 1,000 Metric Tons Table 54— Japan: Protein meal demand in 1990, various alternatives Livestock Protein MAFF 1990 projections’ ERS projections I3 ERS projections II3 Item production 1980 meal demand Livestock production Protein meal demand2 Livestock production Protein meal demand2 Livestock production Protein meal demand2 1,000 metric tons Beef and veal 418 234 630 510 529 428 596 483 Pork 1,476 1,296 1,940 1,765 2,498 2,273 2,799 2,547 Chicken 1,145 721 1,460 876 1,868 1,121 2,112 1,267 Eggs 1,999 1,619 2,220 1,621 2,398 1,751 2,695 1,967 Dairy products Total protein meal utili- 6,502 455 8,420 589 9,298 651 10,485 734 zation in formula feed 4,299 * 5,361 * 6,224 6,998 Average annual incre- ment, 1980-90 106 Percent 193 270 Average annual growth rate, 1980-90 2.2 3.8 5.0 * = Not applicable. 'Based on MAFF’s Long-Term Prospects for the Demand and Supply of Agricultural Products, November 1980. Computed using production projections from table 49 and 1990 protein meal/product rates from table 51. 54 Projections Expanded pasture and forage production is a major policy initiative of the Government as reflected in its projection that the area devoted to those uses will expand by more than 50 percent (to 1.55 million hectares) by 1990. The rice diversion program and incentives to expand double-crop- ping of rice with feed crops will help approach that goal. Attaining it, however, will be extremely costly and is most unlikely. Earlier MAFF projections were too optimistic. It is more likely that the expansion of pasture and forage area will parallel increases in cattle inventories, maintain- ing a constant ratio between grazing animals and grazing plus fodder area. Under ERS projections I and II, total pasture and forage area will increase to about 1.3 million hectares (table 39). There is a trade-off between forage products and concen- trates to the extent that they are substitutes. During 1975-79, average per hectare forage production was 39 Table 55— Japan: Projections for oilseeds and protein meal Item 1980 1985 projections 1990 projections 1 II 1 II 7,000 metric tons Oilseeds:' Production2 259 354 354 525 525 Imports3 5,899 6,665 6,977 7,473 8,307 (4,401) (5,199) (5,442) (5,903) (6,562) Total utilization 6,158 7,019 7,331 7,998 8,832 Oilseeds not crushed" 1,283 1,215 1,215 1,289 1,289 Oilseeds crushed5 4,875 5,804 6,116 6,709 7,543 Protein meal (soybean equivalent): Production 4,233 4,907 5,119 5,656 6,240 Vegetable oilmeal (domestic and imported oilseeds)6 3,261 3,947 4,159 4,696 5,280 Fishmeal7 972 960 960 960 960 Imports3 534 758 909 1,150 1,412 (326) (470) (563) (736) (904) Exports 63 — — — — (D * * * * Apparent utilization 4,704 5,665 6,028 6,806 7,652 Formula feed8 4,299 5,198 5,512 6,224 6,998 Other uses9 402 467 516 582 654 * = Not applicable. — = None or negligible. Numbers in parentheses show the soybean component of the total amount. 'Includes soybeans, rapeseed, cottonseed, sesame, copra, linseed, palm kernel, and peanuts. 2Based on MAFF’s The Long-Term Prospects for the Demand and Supply of Agricultultural Products which projects expanded pro- duction and area for soybeans and peanuts. 3Oilseed imports are expected to increase more slowly than protein meal imports, reflecting conservative expansionary behavior on the part of crushers. "Oilseeds not crushed are principally soybeans, peanuts, and sesame, which are consumed as food. Soybeans used in traditional Japanese dishes represent about 80 percent of this category. No growth is expected in this category. 5The crush rate for oilseeds is based on a weighted average of crush rate estimates for the oilseeds listed in footnote 1. The rate is ex- pected to grow from 79 percent in 1980 to about 85 percent in 1990 because of no growth in the food category. 6The meal yield for crushed oilseeds is estimated at about 67 percent in 1980. This is expected to increase to about 70 percent in 1990 with more extensive use of soybeans. 7Fishmeal production is expected to show little or no growth in the 1980’s because of higher real fish prices and more extensive use of low-grade fish for human consumption. 'Computed from data in tables 50 and 51. 'Includes protein meal used in simple feeds and for industrial purposes. Growth in this category is assumed to parallel that of protein meal utilization in formula feed. 55 William T. Coyle tons of green matter or 4.7 tons of TDN (assuming a 12-percent TDN content for green roughage). Each addi- tional hectare of forage, therefore, reduces demand for other sources of TDN by approximately 4-5 tons. Assum- ing a constant ratio of pasture and forage area per head of cattle, and assuming that pasture and forage yields in 1990 are the same as the 1975-79 average, these sources will continue to supply about 1 ton of TDN per head of cattle, which is less than half the nutritional requirements for an adult dairy cow. Total pasture and forage availabili- ty according to MAFF projections and according to ERS projections is shown in table 39. Conclusions and Implications for the United States The evidence suggests that Japan will continue through the eighties as a sizable importer of feed grains, oilseeds, and livestock products because of the demand potential of a large affluent population combined with the very lim- ited production potential of its land. The Japanese market will grow, but probably not as rapidly as in the last two decades. Continued expansion of feed imports will be caused by population and income growth, further west- ernization of diets, limited fish supplies, and declining self-sufficiency in some livestock products and feedstuffs. Crowded on a rugged area slightly smaller than that of California, Japan’s population of 118 million is about half that of the United States. Over the next decade, the popu- lation is expected to grow by just under 1 percent per year (compared with a little more than 1 percent per year in the seventies). Meanwhile, per capita income will probably rise by 3 to 4 percent per year— low by past standards (4 to 5 percent in the last decade)— but high compared with the rates projected for other industrialized countries. Population and income growth will ensure that Japan’s demand for meat and other livestock products will be greater in the future. The productivity of Japan’s livestock sector, however, will continue to be severely limited. Official projections in- dicate that self-sufficiency in livestock products will im- prove modestly by 1990. However, these projections assume continued support for the inefficient beef sec- tor—an expensive program likely to meet political op- position in coming years. It is more probable that self-suf- ficiency for relatively efficient livestock enterprises will improve while that for beef will decline, leading to greater dependence on beef imports. Furthermore, Japan’s lim- ited capacity to expand production of feedstuffs will assure continued dependence on imports. The westernization of the diet could accelerate if the Jap- anese diet is unable to continue its historical depend- ence on fish. The imposition of 200-mile fishing limits by many nations since 1977 threatens to restrict Japan’s future supply of fish, currently its most important source of animal protein. Japan has increasingly depended on fish imports since 1972, when its annual catch leveled off between 10 million and 11 million tons. If the retail prices of fish and other marine products continue to rise at a more rapid rate than prices of livestock products, con- sumers will continue to substitute meat, eggs, and dairy products. The result would be a combination of growth in imports of finished livestock products and increased do- mestic livestock production, which in turn would require more imports of feed grains and oilseeds. Future Japanese agricultural policies will also affect growth in the Japanese import markets for livestock prod- ucts and for feedstuffs. Currently, Japan’s livestock sec- tor is protected from free market forces. High guaranteed prices, tariffs, import quotas, and input subsidies are re- quired to keep land, labor, and capital in livestock produc- tion. Feedstuffs are imported more freely but are affected indirectly by protectionist livestock policies. The importance of policy has been emphasized through- out this study even though the projections in the previous section were made under the assumption that policy and prices would remain constant through the eighties— an assumption necessary to simplify our view of the future. A sensitivity to possible policy changes, however, is im- portant and should guide our thinking with respect to the future of Japan’s agriculture and its livestock sector. For example, a dramatic relaxation in the Government's pro- tectionist policy for beef could have a significant effect on Japan’s production, consumption, and trade in beef. Although such a change was not anticipated in the pro- jections it could happen given foreign pressure to liberalize trade and domestic pressure to reduce con- sumer prices. Japan will face three broad policy alter- natives in the eighties with respect to its agricultural (in- cluding its livestock) sectors: • Maintain the present policy, which sustains small- scale, high-cost agricultural production. This course is unlikely because of costly surplus prob- lems (for some dairy products, rice, and mandarin oranges), the waning political influence of farm- ers, the increasing importance of consumer and urban-based groups, and pressure from foreign food suppliers for easing import restrictions. • Make the Japanese market less restrictive to im- ports, a course favored by some Japanese con- sumer groups and foreign interests, but a course that would produce serious dislocation. Although Japanese society would theoretically experience a 56 U.S. Implications net gain, producers would sustain immediate and sizable cuts in income. A rapid switch to laissez faire is highly unlikely. • Follow a middle course, with Japan continuing to protect its agriculture as much as is politically possible, while gradually improving its efficiency and competitiveness. The United States, as in the past, will have a major role in supplying Japan with the feed grains, oilseeds, fodders, and roughages required to support its livestock in- dustries. The United States will also supply an important share of the finished livestock products required to sup- plement domestic production in meeting consumer de- mand (table 56). Table 56— Japan: Projections of net imports of livestock products, grains, and oilseeds and the U.S. share Item 1980 1985 projections 1990 projections 1 II 1 II 1,000 metric tons Coarse grains 18,863 23,615 24,833 29,082 32,185 (15,636) (15,350) (16,140) (18,900) (20,920) Oilseeds 5,899 6,665 6,977 7,473 8,307 (4,289) (5,000) (5,232) (5,680) (6,315) Soybeans 4,401 5,199 5,442 5,903 6,562 (4,226) (4,940) (5,170) (5,610) (6,235) Protein meal' 471 758 909 1,150 1,412 (245) (341) (410) (540) (660) Soybean meal 325 470 563 736 904 (239) (329) (395) (515) (630) Livestock products: Beef and veal 174 339 361 601 682 (31) (85) (90) (150) (170) Pork 155 170 181 115 129 (43) (50) (54) (35) (40) Chicken 67 75 79 64 72 (41) (45) (47) (40) (43) Eggs 67 52 54 32 35 (15) (8) (5) (5) (5) Dairy products2 1,026 1,128 1,198 1,185 1,336 (10) (23) (24) (24) (27) Numbers in parentheses refer to the U.S. shares. In most cases the average U.S. share for 1975-81 is assumed to hold for the projection period. ’Soybean meal equivalent basis. 2Fluid basis. The unusually high U.S. share of Japan’s coarse grain im- ports in 1980 and 1981 (more than 80 percent) will not be maintained through the rest of the decade. Historical trade patterns, altered as a result of the U.S. suspension of grain sales to the Soviet Union, should eventually be re- stored, with U.S. share of 65 percent to be expected. This would amount to 18.9 million to 20.9 million tons by 1990 based on the assumptions in the previous section (tables 52 and 53). Major U.S. competitors will be Australia (barley), Canada (barley), Argentina (sorghum), South Africa (corn), and Thailand (corn). Growth in protein meal demand will parallel that for feed grain. Soybean meal will remain the most important pro- tein meal used in formula and simple feeds. As the domi- nant supplier of soybeans and soybean meal, the United States will benefit from this development. The U.S. import share during the last half of the seventies was 95 percent for soybeans and 71 percent for soybean meal. Similar shares should prevail in future years. The greatest chal- lenge could come from Brazil, which recently eliminated export quotas and other controls on soybeans and deriva- tive products. China, a traditional supplier of food-quality soybeans, will not be an important competitor. U.S. exports of soybeans to Japan could reach 5.7 million to 6.2 million tons by 1990 assuming at least a 95-percent U.S. share in Japanese imports and growth in Japanese livestock pro- duction as described in the preceding section. U.S. exports of soybean meal could grow even more rapid- ly than soybean exports. If Japanese crushers gauge their rate of crush according to expected increases in the do- mestic demand for oil, then the import demand for meal will likely grow more rapidly than that for beans since the income elasticity of demand for oil will probably be less than that for meal over the next decade. U.S. exports of soybean meal could reach 515,000 to 630,000 tons by 1990, assuming a 70-percent import share. This would be substantially different if Japan’s crushers could econom- ically export oil, something they have not done in the past. Growth in the Japanese market for imported livestock products should be limited except for beef. The U.S. his- torical share of pork (30 percent for 1975-81), poultry meat (60 percent), eggs (15 percent), and dairy products (2 per- cent) should be maintained while that for beef (14 per- cent) could rise substantially, perhaps reaching 25 per- cent of the market. Recently implemented concessions resulting from the MTN have led to annual increases in Japan’s imports of high-quality beef, a part of the beef trade in which the United States is very competitive. As a result, U.S. exports have almost doubled and now repre- sent 18-20 percent of total Japanese beef imports. 57 Japan’s Feed-Livestock Economy Growth in beef imports will continue even without major policy changes. A Japanese dairy policy that seeks to eliminate surpluses of milk would limit growth in the sup- ply of beef from dairy culls, dairy steers, and dairy heifers. Future expansion of the nondairy beef sector, dominated by the Wagyu breed, is likely to be limited by inherent in- efficiencies. Slow growth in domestic beef production and a relatively rapid growth in beef demand will lead to an erosion in self-sufficiency and increased dependency on imports. Since the nondairy beef sector is relatively less efficient than the dairy sector and since Wagyu ani- mals produce a higher quality beef than dairy animals, the share of imported high-quality beef should increase. The agricultures of the United States and Japan will con- tinue to be interconnected by trade. Although Japan’s livestock industry is, in many ways, small and still in its formative stages, it depends on imported feedstuffs for at least three-quarters of its feed supply, making Japan one of the largest importers of feedstuffs in the world. The United States, with its comparative advantage and with its capacity to produce and market large amounts of grains and oilseeds, will maintain a prominent position in the Japanese market. Although efforts to increase U.S. exports of processed and higher value-added items will intensify, feedstuffs will continue to be the main compo- nent of this trade. 58 Bibliography Bibliography 1. Attschul, Aaron M., and Harold L. Wilcke (eds.). New Protein Foods, Vol. 3, Animal Protein Supplies, Part A. Academic Press, Inc., N.Y. 1978. 2. Boltho, Andrea. Japan: An Economic Survey, 1953-73. Oxford University Press, London, 1975. 3. The Boston Consulting Group. A Simulation Model for Assessing the Ingredient Composition of Formula Feeds in Japan. Tokyo, Sept. 1977. 4. Caplan, Lois. “The Japanese Beef Industry,” unpub- lished paper, Economics, Statistics, and Coop- eratives Service, U.S. Dept, of Agriculture, Aug. 1979. 5. Cooperative for Research and Liaison, Inc. A Study of the Formula Feed Industry of Japan. Tokyo, 1967. 6. A Study of the Japanese Poultry In- dustry. Tokyo, 1970. 7. . A Study of the Market Structure for Pork and Pork Products in Japan. Tokyo, 1968. 8. A Study of the Market Structure for Poultry Meat in Japan. Tokyo, no date, late sixties. 9. Coyle, William, and Alan Hemphill. “200-Mile Fishing Zones Seen Boosting Japan’s Imports of Meat, Feed,” Foreign Agriculture. Nov. 28, 1977. 10. Food and Agricultural Organization of the United Na- tions. Food Balance Sheets 1975-77 Averages and Per Caput Food Supplies 1961-65 Averages 1967 to 1977. Rome, 1980. 11. The Fuji Bank, Ltd., Research Division. “Food Service Industry,” Fuji Bank Bulletin. Aug. 1979. 12. Government of Australia, Bureau of Agricultural Eco- nomics. Japanese Agricultural Policies: Their Ori- gins, Nature, and Effects on Production and Trade. Canberra, 1981. 13. Government of Japan, Ministry of Agriculture and Forestry, Food Balance Sheets: 1955-66. Sept. 1968. 14. , Ministry of Agriculture, Forestry, and Fisheries. The Long-Term Prospects for the Demand and Supply of Agricultural Products. Nov. 1980. 15. , Ministry of Agriculture, Forestry, and Fisheries. Long-Term Prospects of Production and Demand of Agricultural Products in Japan. Aug. 1975. 16. , Ministry of Agriculture, Forestry, and Fisheries. Statistical Yearbook. Various issues. 17. , Ministry of Agriculture, Forestry, and Fisheries, Livestock Bureau. Feed Situation in Japan. 1967. 18. , Ministry of Agriculture, Forestry, and Fisheries, Livestock Bureau. The Meat Statistics in Japan. Various issues. 19. , Ministry of Finance. Japan Exports and Imports: Commodity by Country. Various issues. 20. , Office of the Prime Minister. Annual Report on the Family Income and Expenditure Sur- vey, 1978. Tokyo, July 1979. 21. , Office of the Prime Minister, Japan Statistical Yearbook. Various issues. 22. Groves, Gary. “Japan’s LIPC Stabilizes Beef Prices, Maintains Import Controls,” Foreign Agriculture. Aug. 28, 1978. 23. Hayami, Yujiro. “Agricultural Issues in Japan’s Exter- nal Economic Coordination,” unpublished paper. Tokyo Metropolitan Univ., July 1980. 24. . “Trade Benefits to All: A Design of the Beef Import Liberalization in Japan,” American Jour- nal of Agricultural Economics. May 1979. 25. Japan’s External Trade Organization. Japanese Fish- eries and Trade of Fishery Products. AG-5, Tokyo, 1981. 26. Japan Feed Association. Shiryo Geppo, (Feed Month- ly). Various issues. 27. . Yearly Report on Concentrate Feed. Various issues. 28. Japan Fisheries Association. Fisheries of Japan, 1980. 1980. 29. The Japan Flour Millers Association. “Japanese Wheat Import and Pricing Policies,” unpublished manuscript written for U.S. Dept, of Agriculture. Tokyo, May 1978. 30. Kester, Annie Y. “Demand for Fish in Japan and the Westernization of the Japanese Diet,” unpublished manuscript. Economics, Statistics, and Cooperatives Service, U.S. Dept, of Agriculture. May 1980. 59 William T. Coyle 31. “The New Law of the Sea and the Jap- anese Fishing Industry,” unpublished manuscript. Economics, Statistics, and Cooperatives Service, U.S. Dept, of Agriculture, Sept. 1980. 32. Livestock Industry Promotion Corporation, UPC. Tokyo, Feb. 1975. 33. Longworth, John W. “Feed-Calf Price-Support Policies in Japan,” Review of Marketing and Agri- cultural Economics. Vol. 46, no. 2 (Aug. 1978). 34. . “Institutions and Policies Influencing Japanese Beef Imports,” Review of Marketing and Agricultural Economics, vol. 44, nos. 1 and 2 (March and June 1976). 35. . “The Japanese Beef Market: Recent Developments and Future Policy Options,” Review of Marketing and Agricultural Economics, vol. 46, no. 3 (Dec. 1978). 36. Lopez, Michael. Unpublished elasticity estimates for Grains, Oilseeds, and Livestock (GOL) Model, Eco- nomic Research Service, U.S. Department of Agricul- ture 1981. 40. Reischauer, Edwin O. The Japanese. Harvard Univ. Press, Cambridge, Mass., 1978. 41. Rudofsky, Bernard. The Kimono Mind. Doubleday & Co., Inc., New York, 1965. 42. Sanderson, Fred H. Japan’s Food Prospects and Pol- icies. The Brookings Institution, Washington, D.C. 1978. 43. Steinberg, Rafael. The Cooking of Japan. Time-Life Books, New York, 1976. 44. Tezuka, Kaneko. Japanese Food. Board of Tourist In- dustry, Japanese Government Railways, Tokyo. 1936. 45. U.S. Dept, of Agriculture, Foreign Agriculture Service, Attache reports.: i JP9087, Nov. 7, 1969. ii TOFAS, 622, Sept. 12, 1977. iii JP9089, Aug. 27, 1979. iv JP0267, Nov. 7, 1980. v JP1010, Jan. 22, 1981. vi J PI 092, May 27, 1981. vii JA2028, Mar. 1, 1982. 37. Matsuda, Yoshiaki, and Rodney Tyers. An Analysis of Recent Trends in Japanese Fish Production, WP-80-8. Resource Systems Institute, East-West Center, Hono- lulu, Hawaii, Oct. 1980. 38. Mielke, Myles J. “Compilation and Analysis of De- mand Elasticities for Livestock Products in the Euro- pean Community and Japan: Based on Studies Using Historical Series from the 1950’s to the 1970’s with Projections up to 1985,” Foreign Demand and Com- petition Division working paper, Economic Research Service, U.S. Dept, of Agriculture. May 1978. 46. . Foreign Agriculture. Various issues. 47. . Nontariff Barriers Affecting Trade in Agricultural Products, Japan. ATP 2-72. June 1972. 48. Watanabe, Tadashi. A Brief History of the Develop- ment of the Dairy Industry in Hokkaido, Japan. Hok- kaido University, Sapporo, 1964. 49. Wheat Associates, U.S. A. Wheat Importation and Marketing in Japan. Tokyo, 1971. 39. Ogura, Takekazu. Agricultural Development in Modern Japan. Fuji Publishing Co., Tokyo, 1963. 50. Yuize, Yasuhiko. “Truth About Japanese Agriculture,” Japan Quarterly. July-Sept. 1978. 60 Appendix Tables Appendix table 1— Japan: Demand elasticities for meat products and fish Reference information Elasticity of— Statistical information Commodity and Time period source Historical Projection Income Own-price Cross-price Equation' R2 Beef/veal: FAO (1967) 1961-63 1975-85 1.00 DL FAO (1971) 1964-66 1970-80 .70 SL Filippello (1970) 1965 .50 - 1.24 .20 pork 1.14 poultry .44 fish Filippello (1970) 1980 .64 -.77 .15 pork .19 poultry .27 fish Gruen (1968) 1959-61 1980 1.20 Japan (1974)2 1963 1.31 DL 1965 1.16 DL 0.99 1967 1.20 DL 1969 .98 DL 1970 1.02 DL 1972 .88 DL 1973 .89 DL .90 Japan (1974)3 1955-64 1.10 -.96 DL .78 1964-73 1.18 - 1.68 DL .85 1955-73 1.09 - 1.39 DL .69 OECD (1968) 1961-63 .74 DL .58 OECD (1968) 1975-85 .90 DL Sanderson (1978) 1963-74 1.78 -2.18 L .91 1974-85 1.89 L Kester (1980) 1960-70 1.38 -.99 - .20 fish L .97 1.02 pork 1.04 chicken 1960-78 1.69 - 1.53 DL .73 1978-82 1.5 - 1.2 1983-85 1.3 - 1.2 Lopez (1981) 1965-79 1.74 - 1.27 DL .88 Pork: FAO (1967) 1961-63 1975-85 1.20 SL FAO (1971) 1964-66 1970-80 .90 SL Filippello (1970) 1965 .72 - .72 .26 beef .17 poultry .09 fish Filippello (1970) 1980 .82 - .45 .14 beef .12 poultry .05 fish Japan (1 974)2 1963 1.23 DL Japan (1974)2 1965 1.17 DL 0.97 See footnotes at end of table. Continued 61 Japan’s Feed-Livestock Economy Appendix table 1— Japan: Demand elasticities for meat products and fish— Continued Reference information Elasticity of— Statistical information Commodity and Time period source Historical Projection Income Own-price Cross-price Equation’ R2 Japan (1974)2 1967 .87 DL 1969 .75 DL 1970 .71 DL 1972 .67 DL 1973 .61 DL .96 Japan (1 974)3 1955-64 2.78 - 1.83 DL .99 1964-73 1.46 - 1.76 DL .96 1955-73 2.20 - 1.07 DL .98 OECD (1968) 1961-63 1.47 DL .68 OECD (1968) 1962-75 1.50 DL 1975-85 1.50 SL Sanderson (1978) 1963-74 1.04 - 1.41 L .95 1974-85 .95 Kester (1980) 1960-75 .85 - .77 .63 beef L .99 .28 chicken 1960-78 1.16 -2.05 SL .92 1978-82 1.1 - 1.7 1.0 - 1.7 Lopez (1981) 1965-79 1.25 - 1.08 DL .95 Poultry: FAO (1967) 1961-63 1975-85 1.70 SL FAO (1971) 1964-66 1970-80 .90 SL Filippello (1970) 1965 .95 - 1.16 .35 beef .11 pork .09 fish Filippello (1970) 1980 1.18 -.88 .20 beef .08 pork .05 fish Japan (1974)2 1963 .90 DL 1965 .73 DL 0.87 1967 .68 DL 1969 .49 DL 1970 .53 DL 1972 .37 DL 3 1973 .31 DL .50 Japan (1974)3 1955-64 3.10 -1.19 DL .99 1965-73 .56 -2.33 DL .92 1955-73 2.95 .04 DL .99 OECD (1968) 1961-63 3.47 DL .92 1962-75 1.90 DL 1975-85 1.30 SL See footnotes at end of table. Continued 62 Appendix Tables Appendix table 1— Japan: Demand elasticities for meat products and fish— Continued Reference information Elasticity of— Statistical information Commodity and Time period source Historical Projection Income Own-price Cross-price Equation1 R2 Sanderson (1978) 1963-74 .97 -2.17 DL .99 1974-85 .97 Kester (1980) 1960-75 1.20 - .65 .65 pork L .87 1960-78 1.27 - 1.25 L .86 1978-82 1.2 - 1.0 1983-85 1.0 - 1.0 Lopez (1981) 1965-79 1.10 - 1.09 DL .99 Fish: FAO (1962) 1957-59 1970 0.50 FAO (1962) 1961-63 1975-85 .30 LI FAO (1971) 1964-66 1970-80 .30 LI Filippello (1970) 1965 - .41 -0.38 0.33 beef .21 pork .15 poultry Filippello (1970) 1980 - .13 - .44 .39 beef .29 pork .23 poultry Japan (1974)2-6 ’3 1963 .65 DL 1965 .73 DL 1967 .50 DL 1969 .52 DL 1970 .47 DL 1972 .39 DL 1973 .45 DL 0.83 Japan (1971)2'6'13 1955-62 .52 - 1.03 DL .84 1963-70 .72 - .81 DL .78 1955-70 .44 -.59 DL .73 Japan (1 974)2 6'1 4 1963 .60 DL 1965 .63 DL 1967 .60 DL 1969 .53 DL 1970 .44 DL 1972 .52 DL 1973 .54 DL .97 Japan (1974)314 1955-64 .45 - 1.25 DL 1964-73 1.33 -.88 DL 1955-73 4'9.14 *.16 DL Kester (1980) 1960-75 .44 - .23 L 1960-78 .64 - .47 L 1960-69 .21 — .24 beef .16 chicken SL 1970-78 .18 .21 beef .14 chicken SL 1960-78 .20 .22 beef .15 chicken SL See footnotes at end of table. Continued 63 William T. Coyle Appendix table 1— Japan: Demand elasticities for meat products and fish— Continued Reference information Elasticity of — Statistical information Commodity and source Time period Historical Projection Income Own-price Cross-price Equation' R2 1978-82 .6 - .4 1982-85 .5 - .4 Lopez (1981) 1960-78 .49 DL .94 Mutton/Iamb: FAO (1967) 1961-63 1975-85 1.40 SL FAO (1971) 1964-66 1970-80 .60 SL Gruen (1968) 1959-61 1980 3.00 SL Lopez (1981) 1965-79 .71 -0.59 SL 0.65 Other meat: FAO (1967) 1961-63 1975-85 .80 SL FAO (1971) 1964-66 1970-80 .60 SL Japan (197 1 )5-6 1963 1.45 DL .93 1965 1.74 DL .96 1967 1.32 DL .96 1969 1.04 DL .96 1970 .68 DL .85 Japan (1 974)5-6 1973 .95 DL .83 Japan (1974)3'7 1955-64 2.00 -2.86 DL 1964-73 .88 - .30 DL 1955-73 1.27 -3.13 DL Japan (1 974)3-8 1956-65 2.43 -3.24 DL 1964-73 1.14 9 - 1.36 DL 1956-73 1.42 8 -.39 DL OECD (1968)'° 1975-85 1.00 DL See footnotes at end of table. Continued 64 Appendix Tables Appendix table 1— Japan: Demand elasticities for meat products and fish— Continued Reference information Elasticity of— Statistical information Commodity and source Time period Historical Projection Income Own-price Cross-price Equation’ R2 Total meat: FAO (1962) 1957-59 1970 1.70 SL FAO (1965) 1961-63 1975-85 1.12 SL FAO (1971) 1964-66 1970-80 .79 SL Japan (1 974)2 6 1963 1.33 DL 1965 1.29 DL 0.93 1967 1.13 DL 1970 .92 DL 1972 .84 DL 1973 .80 DL .96 Japan (197 1 )3-6 1958-70 1.38 -0.45 DL .98 1963-70 1.08 -.53 DL .96 OECD (1968)" 1961-63 1.45 DL .93 OECD ( 1 968)' 2 1961-63 1.64 DL .93 1962-75 1.40 DL 1975-85 1.40 SL Sanderson (1978) 1963-74 1.17 - 1.33 L pork, poultry, beef) 1974-85 1.06 'The functional form of an equation is identified with DL for double-logarithmic, SL for semilogarithmic, L for linear, and LI for log- inverse. 2Cross-section elasticity for all nonfarm households. 3For nonfarm households in cities larger than 50,000 population. 4R2 less than 0.64. "Processed meats — excludes pork, ham, and sausage. "Consumption measured as expenditure. 7Ham. "Sausage. "Student t-value less than 1.0. '°Mutton/lamb, horsemeat, etc. "Includes whale meat. "Excludes whale meat. "Fresh seafood. "Salted and dried seafood. Principal source: Myles J. Mielke, Compilation and Analysis of Demand Elasticities for Livestock Products in the European Community and Japan: Based on Studies Using Historical Series from the 1950’s to the 1970’s with Projections up to 1985, Foreign Demand and Competition Div. Working Paper, U.S. Dept, of Agriculture, May 1978. See detailed list of references at end of appendix table 3. 65 Japan’s Feed-Livestock Economy Appendix table 2— Japan: Demand elasticities for dairy products Reference information Elasticity of— Statistical information Commodity and source Time period Historical Projection Income Own-price Cross-price Equation' R2 Milk whole: Filippello (1967)5 1953/54-64/65 1.36 -0.91 Filippello (1967)e 1953/54-64/65 1.70 - .27 Filippello (1970) 1965 1.15 - .55 Filippello (1970) 1980 1.45 -.74 FAO (1962) 1957-59 1970 2.00 LI FAO (1967)7 1961-63 1975-85 .80 SL FAO (1971) 1964-66 1970-80 .50 Gruen 1959-61 1980 2.10 SL IAER (1964) 1951-60 1965-75 2.10 - 1.16 DL 0.96 Japan (1974) 1963 1.32 DL 1965 1.28 DL .93 1967 1.08 DL 1969 .71 DL 1970 .76 DL 1972 .62 DL 1973 .56 DL .67 Japan (1974)® 1955-64 2.12 - 1.16 DL .99 1964-73 .27 -2.01 DL .80 1955-73 1.51 4 -.31 DL .94 OECD (1968)® 1955-64 1.62 LI .99 OECD (1968)’° 1955-64 1.60 LI OECD (1968)® 1961-63 1.38 LI OECD (1968)’° 1961-63 1.44 LI OECD (1968) 1975-85 1.40 SL Butter: FAO (1971)" 1964-66 1970-80 1.20 SL Gruen (1968) 1959-61 1980 1.80 SL IAER (1964) 1951-60 1965-75 .82 - 1.37 DL 0.93 IAER (1964) 1951-60 1965-75 1.76 .88 - 1.97 (bread/ DL .96 rice)'2 Japan (1974)2 1963 2.76 DL 1965 2.64 DL .97 1967 1.98 DL 1969 1.97 DL 1970 1.95 DL 1972 1.71 DL 1973 1.41 DL .88 Japan (1 974)3 1955-64 .77 -2.03 DL 1964-73 -1.28 DL 1955-73 1.68 4.73 DL OECD (1968) 1955-64 1.65 LI .93 1961-63 1.40 LI 1975-85 1.85 LI See footnotes at end of table. Continued 66 Appendix Tables Appendix table 2— Japan: Demand elasticities for dairy products— Continued Reference information Elasticity of— Statistical information Commodity and Time period source Historical Projection Income Own-price Cross-price Equation' R2 Cheese: FAO (1971) 1964-66 1970-80 1.00 SL Gruen (1968) 1959-61 1980 3.30 SL IAER (1964) 1951-60 1965-75 3.34 1.11 DL 0.97 Japan (1974)2 1963 2.82 DL 1965 2.69 DL .91 1967 1.48 DL 1969 1.18 DL 1970 1.37 DL 1972 1.11 DL 1973 .93 DL .79 Japan (1974)3 1964-73 1.49 3.43 DL OECD (1968) 1955-64 2.89 SL .95 1961-63 2.23 SL 1975-85 2.30 DL Other milk products: Powered milk IAER (1964) 1951-60 1965-75 1.29 -3.27 DL .86 Japan (1 974)3 1965 - .25 DL .02 Japan (1971)3'13 1955-62 1.13 -2.21 DL .94 1963-70 2.03 - .18 DL .96 1955-70 1.51 -.83 DL .87 OECD (1968) 1955-64 142.23 DL .96 OECD (1968) 1975-85 1.80 LI Condensed milk IAER (1964) 1951-60 1965-75 1.08 - 1.34 DL .73 Total milk products: FAO (1962) 1957-59 1970 2.00 SL FAO (1967) 1961-63 1975-85 .80 SL IAER (1964)' 3 1951-60 1965-75 1.58 - 1.74 DL 0.97 IAER (1964)' 5 1951-60 1965-75 1.43 - 1.68 DL .97 See footnotes at end of table. Continued 67 William T. Coyle Appendix table 2— Japan: Demand elasticities for dairy products— Continued Reference information Elasticity of— Statistical information Commodity and Time period source H istorical Projection Income Own-price Cross-price Equation' R2 Japan 1963 .97 DL .95 1965 .94 DL 1967 .76 DL 1969 .49 DL 1970 .52 DL 1972 .36 DL 1973 .34 DL .73 Japan (1974)2’ 13 1958-70 1.27 -.55 DL .96 1963-70 - .06 - 1.93 DL .95 OECD (1968)" 1957-64 ’"1.63 DL .97 'The functional form of an equation is identified with DL for double-logarithmic, SL for semilogarithmic, L for linear, and LI for log- inverse. 2Cross-section elasticity for all nonfarm households. 3For nonfarm households in cities larger than 50,000 population. "Student t-value less than 1.0. 5Ordinary least-squares regression. "Three-stage, least-squares regression. 7Excludes milk equivalent of butter. "Milk and cream for human consumption. "Includes school lunch program. ’“Exclude school lunch program. "Includes skim milk equivalent. "Price ratio of bread to rice. "Consumption measured as expenditure. ’"Same elasticity for 1961-63. "Consumption measured as per capita quantity. Principal source: Myles J. Mielke, Compilation and Analysis of Demand Elasticities for Livestock Products in the European Community and Japan: Based on Studies Using Historical Series from the 1950’s with Projections up to 1985, Foreign Demand and Competition Div. Working Paper, U.S. Dept, of Agriculture, May 1978. See detailed list of references at end of appendix table 3. 68 Appendix Tables Appendix table 3— Japan: Demand elasticities for eggs Reference information Elasticity of- Statistical information Commodity and source Time period Historical Projection Income Own-price Cross-price Equation’ R2 Filippello (1970) 1965 0.20 -0.06 0.32 fish .36 wheat - .13 rice Filippello (1970) 1980 .27 -.03 .21 fish .03 wheat - .07 rice FAO (1962) 1957-59 1970 1.00 FAO (1967) 1961-63 1975-85 .80 SL FAO (1971) 1964-66 1970-80 .50 LI Japan (1974)2 1963 .66 DL 1965 .55 DL 0.97 1967 .48 DL 1969 .34 DL 1970 .30 DL 1972 .23 DL 1973 .17 DL .57 Japan (1974)3 1955-64 1.42 - .66 DL .99 1964-73 -.45 - .92 DL .90 1955-73 1.34 4 - .003 DL .55 OECD (1968) 1957-64 1.70 DL .55 1961-63 1.70 DL 1975-85 .80 Lopez (1981) 1960-78 except .90 DL .98 1966 'The functional form of an equation is identified with DL for double-logarithmic, SL for semilogarithmic, L for linear, and LI for log- inverse. 2Cross-section elasticity for all nonfarm households. 3For nonfarm households in cities larger than 50,000 population. "Student t-value less than 1.0. Principal source: Myles J. Mielke, Compilation and Analysis of Demand Elasticities for Livestock Products in the European Community and Japan: Based on Studies Using Historical Series from the 1950’s with Projections up to 1985, Foreign Demand and Competition Div. Working Paper, U.S. Dept, of Agriculture, May 1978. See detailed list of references following this table. 69 Japan’s Feed-Livestock Economy Bibliography to Appendix Tables 1-3 1. Filippello, A Nicholas. A Dynamic Econometric Investigation of the Japanese Livestock Economy. Ph.D. diss. University of Columbia, Mo. 1967. 2. . The Japanese Grain-Livestock Economy— An Econometric Projection to 1980 with Emphasis on Grain Imports. U.S. Dept, of Agriculture, Economic Research Service. Unpublished. 1970. 3. Food and Agricultural Organization (FAO) of the United Nations. Agricultural Commodities: Projec- tions for 1970. FAO Commodity Review. Special supplement. Rome. 1962. 4. The World Meat Economy. Commodity Bui. Series 40. Rome. 1965. 5. Agricultural Commodities: Projections for 1975 and 1985. 2 vols. Rome. 1967. 6. Agricultural Commodity Projections, 1970-1980. 2 vols. Rome. 1971. 7. Gruen, F. H., and others. Australia: Long-Term Projec- tions of Agricultural Supply and Demand — 1965 to 1980. Dept, of Econ., Monash Univ. Clayton, Australia. 1968. 8. Institute of Agricultural Economic Research (IAER). Japanese Import Requirement: Projections of Agri- cultural Supply and Demand for 1965, 1970, and 1975. Tokyo. 1964. 9. Japan, Ministry of Agriculture and Forestry. Shokuryo Juyo Bunseki (Analysis of Food Demand). Tokyo. 1971 and 1974. 10. Kester, Annie Y. “Demand for Fish in Japan and the Westernization of the Japanese Diet.” Unpublished manuscript. U.S. Dept, of Agriculture, Economics, Statistics, and Cooperative Service. Sept. 1980. 11. Lopez, Michael. Unpublished elasticity estimates for the Grains, Oilseed, and Livestock Model (GOL). Eco- nomic Research Service, U.S. Department of Agricul- ture. 1981. 12. Organization for Economic Cooperation and Develop- ment (OECD). Agricultural Projections for 1975 and 1985: Production and Consumption of Major Food- stuffs. Paris. 1968. 13. . Agricultural Projections for 1975 and 1985. Country Studies. 23 vols. Paris. 1968. 14. Sanderson, Fred H. Japan’s Food Prospects and Policies. The Brookings Institution, Washington, D.C. 1978. 70 Appendix Tables Appendix table 4— Japan: Components of formula feed, all livestock Japan fiscal Corn Sorghum Wheat Barley Rice Other year 1,000 1,000 1,000 1,000 1,000 1,000 metric metric metric metric metric metric tons Percent tons Percent tons Percent tons Percent tons Percent tons Percent I960 1,371 47.5 50 1.7 1961 1,857 44.8 210 5.1 76 1.8 19 0.5 — — — — 1962 2,286 45.4 410 8.2 43 .9 6 .1 — — 36 0.7 1963 2,583 41.2 787 12.5 38 .6 31 .5 — — 49 .8 1964 3,016 40.0 1,011 13.4 36 .5 83 1.1 — — 130 1.7 1965 2,869 35.0 1,544 18.9 21 .3 125 1.5 145 1.8 1966 3,233 32.5 2,366 23.8 17 .2 97 1.0 — — 111 1.1 1967 3,313 32.0 2,581 24.9 18 .2 87 .8 — — 132 1.3 1968 4,284 37.6 2,275 20.0 17 .1 90 .8 — — 99 .9 1969 4,765 35.5 2,939 21.9 43 .3 109 .8 — — 169 1.3 1970 4,417 29.4 3,972 26.3 140 .9 129 .9 467 3.1 1971 3,949 25.1 3,615 23.0 125 .8 130 .8 1,405 8.9 366 2.3 1972 5,232 30.0 3,621 20.8 132 .8 148 .8 1,227 7.0 401 2.3 1973 6,332 34.9 3,895 21.5 122 .7 233 1.2 493 2.7 327 1.8 1974 6,093 35.7 4,197 24.6 45 .2 153 .9 — — 399 2.4 1975 6,263 37.1 3,815 22.6 15 .1 157 .9 399 2.4 1976 6,787 36.3 4,613 24.7 58 .3 166 .9 — — 285 1.5 1977 7,351 36.8 5,031 25.2 132 .7 165 .8 — — 263 1.3 1978 8,164 38.5 5,105 24.1 163 .8 200 .9 — — 256 1.2 1979 8,934 39.2 5,481 24.0 178 .8 204 .9 — — 320 1.4 1980 10,359 46.2 3,689 16.6 145 .7 198 .9 - - 198 1.3 Rice bran Alfalfa meal Wheat bran Rice bran oilcake Other brans pellets Soybean meal 1,000 1,000 1,000 1,000 1,000 1,000 metric metric metric metric metric metric tons Percent tons Percent tons Percent tons Percent tons Percent tons Percent 1960 302 10.5 137 4.8 1 1 105 3.6 157 5.4 1961 461 11.1 56 1.4 142 3.4 1 1 180 4.3 236 3.7 1962 443 8.8 66 1.3 175 3.5 1 1 206 4.1 319 6.3 1963 516 8.2 68 1.1 217 3.5 1 1 279 4.5 416 6.6 1964 579 7.7 78 1.0 241 3.2 1 1 344 4.6 521 6.9 1965 554 6.8 74 .9 241 2.9 1 1 423 5.2 623 7.6 1966 566 5.7 69 .7 258 2.6 263 2.6 289 2.9 806 8.1 1967 495 4.8 77 .7 278 2.7 272 2.6 289 2.8 858 8.3 1968 508 4.5 115 1.0 301 2.6 300 2.6 324 2.3 939 8.2 1969 541 4.0 136 1.0 341 2.5 380 2.6 366 2.8 1,239 9.2 1970 500 3.3 154 1.0 358 2.4 456 3.0 412 2.7 1,469 9.7 1971 495 3.2 135 .9 360 2.3 492 3.1 411 2.6 1,596 10.1 1972 555 3.2 160 .9 347 2.0 519 3.0 442 2.5 1,778 10.2 1973 596 3.3 172 .9 324 1.8 554 3.1 419 2.3 1,776 9.8 1974 509 3.0 168 1.0 333 1.9 536 3.1 378 2.2 1,709 10.0 See footnotes at end of table. Continued 71 William T. Coyle Appendix table 4— Japan: Components of formula feed, all livestock— Continued Japan fiscal year Wheat bran Rice bran Rice bran oilcake Other brans Alfalfa meal pellets Soybean meal 1,000 metric tons Percent 1,000 metric tons Percent 1,000 metric tons Percent 1,000 metric tons Percent 1,000 metric tons Percent 1,000 metric tons Percent 1975 495 2.9 145 .9 321 1.9 532 3.1 332 2.0 1,787 10.6 1976 545 2.9 142 .8 315 1.7 524 2.8 341 1.8 1,942 10.4 1977 521 2.6 139 .7 321 1.6 562 2.8 340 1.7 2,205 11.1 1978 561 2.7 140 .7 294 1.4 611 2.9 344 1.6 2,364 11.1 1979 578 2.5 151 .7 311 1.4 733 3.2 341 1.5 2,474 10.9 1980 633 2.9 158 .7 282 1.3 811 3.6 312 1.4 2,489 11.2 Other vegetable oilcake Fishmeal Fish solubles Skim milk powder Other animal meals Total 1,000 metric tons Percent 1,000 metric tons Percent 1,000 metric tons Percent 1,000 metric tons Percent 1,000 metric tons Percent 1,000 tons 1960 101 3.5 171 5.9 2 2 41 1.4 2,884 1961 127 3.1 218 5.3 57 1.4 2 2 49 1.2 4,144 1962 172 3.4 243 4.8 63 1.3 2 2 54 1.1 5,030 1963 248 4.0 308 4.9 57 .9 2 2 47 .8 6,277 1964 315 4.2 371 4.9 60 .8 2 2 58 .7 7,543 1965 378 4.6 346 4.2 69 .8 2 2 69 .8 8,188 1966 468 4.7 342 3.4 93 .9 15 .2 88 .9 9,945 1967 495 4.8 382 3.7 91 .9 22 .2 95 .9 10,362 1968 437 4.7 467 4.1 91 .8 32 .3 92 .8 11,403 1969 608 4.5 502 3.7 90 .7 45 .3 96 .7 13,443 1970 684 4.5 474 3.1 95 .6 45 .3 82 .6 15,097 1971 665 4.2 511 3.2 84 .5 41 .3 76 .5 15,749 1972 661 3.8 559 3.2 96 .6 41 .2 97 .6 17,425 1973 635 3.5 587 3.2 95 .5 43 .2 116 .6 18,140 1974 522 3.1 552 3.2 98 .6 31 .2 113 .7 17,075 1975 434 2.6 588 3.5 97 .6 34 .2 160 .9 16,897 1976 480 2.6 615 3.3 100 .5 57 .3 194 1.0 18,671 1977 393 2.0 565 2.8 90 .5 98 .5 288 1.4 19,948 1978 361 1.7 619 2.9 84 .4 101 .5 327 1.5 21,210 1979 403 1.8 645 2.8 91 .4 104 .5 331 1.4 22,796 1980 451 2.0 566 2.5 77 .3 81 .4 343 1.5 22,292 — = None or neligible. 'Prior to 1966 “other brans” were included with “alfalfa meal pellets.” JPrior to 1966 “skim milk powder” was included with “other animal meals.” Source: Feed Association, Shiryo Geppo (Feed Monthly), various issues. 72 Appendix Tables Appendix table 5— Japan: Components of formula feed, beef Japan fiscal year Corn Sorghum Wheat Barley Rice Other grains Wheat bran Rice bran Rice bran oilcake 1964 5 16 1,000 metric tons 13 — 2 15 2 4 1965 5 16 13 — 2 15 2 4 1966 7 32 — 15 — 5 21 3 4 1967 18 67 — 24 — 10 33 7 7 1968 58 124 — 38 — 16 47 16 11 1969 77 171 — 45 — 29 47 23 15 1970 75 277 7 58 — 79 50 33 23 1971 69 377 13 69 82 98 69 41 26 1972 156 452 13 91 85 107 83 52 28 1973 325 605 11 111 29 89 102 68 27 1974 301 573 3 92 — 99 85 59 30 1975 295 477 1 95 103 92 47 25 1976 369 676 4 107 — 89 121 61 29 1977 421 745 13 108 — 97 117 64 34 1978 459 724 15 135 — 98 119 62 30 1979 566 845 20 142 — 116 137 64 37 1980 852 621 20 137 — 95 165 71 37 Other brans Alfalfa meal pellets Soybean meal Other vegetable oilcake Fish- meal Fish solubles Skim milk powder Other animal meal Total 1964 1 2 6 1,000 metric tons 2 — 82 1965 1 3 7 3 82 1966 3 1 10 8 — — — — 123 1967 6 5 20 16 — — — — 240 1968 14 18 36 30 — — — — 452 1969 19 27 48 43 1 — — — 599 1970 25 36 66 59 861 1971 32 51 88 62 1 — — — 1,180 1972 41 69 101 58 2 — — — 1,466 1973 61 86 75 53 2 — — 1 1,815 1974 75 87 59 48 1 — — 1 1,670 1975 80 67 69 45 2 1 1,539 1976 71 82 101 61 3 — 10 1 1,997 1977 79 85 115 59 3 — 11 — 2,168 1978 82 91 114 62 3 1 16 — 2,218 1979 123 106 134 71 3 1 16 1 2,595 1980 149 113 141 77 3 1 14 1 2,706 — = None or negligible. 'Included with alfalfa meal and pellets. Source: Japan Feed Association, Shiryo Geppo (Feed Monthly), various issues. 73 Japan’s Feed-Livestock Economy Appendix table 6— Japan: Components of formula feed, dairy Japan fiscal year Corn Sorghum Wheat Barley Rice Other grains Wheat bran Rice bran Rice bran oilcake 1,000 metric tons 1963 59 69 2 9 3 145 13 38 1964 44 70 2 32 — 8 143 15 40 1965 43 97 1 34 12 148 17 50 1966 47 144 2 24 — 9 168 18 59 1967 58 178 1 23 — 16 166 18 68 1968 113 226 — 20 — 19 173 29 75 1969 118 268 2 21 — 44 178 27 81 1970 91 331 11 24 94 180 28 83 1971 67 315 11 22 81 91 189 17 90 1972 129 339 11 20 76 90 207 22 84 1973 193 334 12 38 30 61 219 20 84 1974 190 354 5 24 — 41 199 18 93 1975 204 342 6 21 65 212 18 93 1976 211 427 4 21 — 49 215 18 96 1977 242 489 5 22 — 52 222 23 106 1978 298 504 5 30 — 54 249 23 101 1979 337 526 7 28 — 69 258 22 104 1980 448 383 8 28 — 65 263 24 95 Alfalfa Other Skim Other Other meal Soybean vegetable Fish- Fish milk animal brans pellets meal oilcake meal solubles powder meal Total 1,000 metric tons 1963 1 59 60 66 3 1 2 3 673 1964 1 66 69 70 2 1 2 5 713 1965 1 80 80 72 2 3 2 6 805 1966 86 18 95 130 2 2 3 3 937 1967 106 22 107 151 3 1 6 3 1,069 1968 137 33 136 178 5 1 9 4 1,328 1969 184 31 161 205 4 1 11 3 1,527 1970 210 37 178 230 4 1 20 2 1,734 1971 240 35 189 235 3 1 21 2 1,825 1972 260 35 206 227 4 1 22 3 1,963 1973 258 34 190 203 4 2 23 4 1,929 1974 253 30 184 183 2 1 15 4 1,803 1975 243 26 205 186 3 1 19 7 1,860 1976 249 25 221 173 2 1 14 5 1,980 1977 272 27 240 156 1 1 21 5 2,125 1978 295 32 270 154 1 — 19 5 2,297 1979 331 35 277 149 1 — 17 4 2,407 1980 340 40 258 160 1 — 14 4 2,345 — = None or negligible. 'Included with alfalfa meal and pellets, included with other animal meals. Source: Japan Feed Association, Shiryo Geppo (Feed Monthly), various issues. 74 Appendix Tables Appendix table 7— Japan: Components of formula feed, swine Japan fiscal year Corn Sorghum Wheat Barley Rice Other grains Wheat bran Rice bran Rice bran oilcake 1,000 metric tons 1963 171 202 4 11 19 128 16 36 1964 228 261 5 28 — 36 172 22 34 1965 297 531 5 60 54 203 22 56 1966 422 920 7 47 — 64 221 28 76 1967 406 905 9 33 — 66 178 26 81 1968 575 784 9 26 — 47 180 30 84 1969 687 1,041 24 37 — 60 206 37 106 1970 751 1,468 63 41 150 191 42 131 1971 645 1,322 71 35 416 110 160 34 131 1972 1,010 1,492 83 32 353 132 180 43 113 1973 1,505 1,597 75 57 124 120 181 36 109 1974 1,496 1,660 32 34 — 120 136 36 102 1975 1,498 1,400 6 34 183 111 31 82 1976 1,686 1,693 45 35 — 135 124 27 80 1977 1,904 1,814 101 30 — 102 106 24 74 1978 2,314 1,910 126 32 — 91 112 28 65 1979 2,652 2,135 132 32 — 113 113 30 69 1980 2,907 1,435 100 31 — 112 121 27 50 Alfalfa Other Skim Other Other meal Soybean vegetable Fish- Fish milk animal brans pellets meal oilcake meal solubles powder meal Total 1,000 metric tons 1963 1 62 48 33 28 3 2 2 890 1964 1 74 65 42 36 3 2 6 1,116 1965 1 121 105 47 48 4 2 9 1,769 1966 84 97 159 95 66 5 2 10 2,561 1967 81 89 165 92 64 3 3 10 2,446 1968 64 84 169 87 80 2 8 8 2,449 1969 76 94 249 96 102 3 18 8 3,082 1970 102 107 344 115 121 3 19 7 3,948 1971 97 94 388 97 130 1 16 5 4,058 1972 91 110 483 98 151 3 16 8 4,721 1973 94 103 540 106 162 2 17 13 5,171 1974 72 81 536 82 148 1 13 18 4,868 1975 71 63 528 56 145 1 13 26 4,541 1976 63 68 624 61 163 3 33 33 5,206 1977 61 69 703 47 153 1 66 47 5,624 1978 64 76 801 38 178 2 65 59 6,307 1979 71 77 897 52 197 1 70 57 7,049 1980 74 68 847 59 168 1 52 56 6,416 — = None or negligible. 'Included with alfalfa meal and pellets, included with other animal meals. Source: Japan Feed Association, Shiryo Geppo (Feed Monthly), various issues. 75 William T. Coyle Appendix table 8— Japan: Components of formula feed, poultry Japan fiscal year Corn Sorghum Wheat Barley Rice Other grains Wheat bran Rice bran Rice bran oilcake 1,000 metric tons 1963 2,278 509 31 8 23 226 36 133 1964 2,662 662 27 13 — 80 240 36 147 1965 2,450 896 14 16 72 168 31 122 1966 2,683 1,265 8 6 — 30 142 19 102 1967 2,753 1,424 8 4 — 36 106 25 110 1968 3,459 1,136 6 4 — 14 100 38 125 1969 3,759 1,417 15 3 — 22 100 45 130 1970 3,478 1,890 57 5 137 76 49 118 1971 3,139 1,586 30 4 820 63 75 40 112 1972 3,909 1,336 32 4 712 70 84 42 121 1973 4,272 1,356 25 17 310 52 93 45 104 1974 4,073 1,610 23 4 — 35 88 52 106 1975 4,217 1,593 2 4 46 80 48 119 1976 4,479 1,812 5 3 — 10 84 34 109 1977 4,737 1,974 12 4 — 11 75 26 108 1978 5,031 1,959 17 4 — 11 81 25 98 1979 5,307 1,969 18 2 — 20 70 34 101 1980 6,036 1,246 15 2 — 25 84 34 99 Alfalfa Other Skim Other Other meal Soybean vegetable Fish- Fish milk animal brans pellets meal oilcake meal solubles powder meal Total 1,000 metric tons 1963 146 302 132 263 53 2 36 4,495 1964 ’ 187 376 179 319 56 2 44 5,370 1965 1 200 425 147 279 62 2 51 5,274 1966 75 171 534 202 266 86 3 74 6,061 1967 69 172 558 210 308 86 4 80 6,366 1968 73 186 589 223 372 86 1 78 6,956 1969 88 208 761 239 380 84 2 79 7,881 1970 113 230 873 274 342 91 2 72 8,458 1971 120 230 923 268 368 82 1 67 8,600 1972 122 226 978 274 393 92 — 84 9,173 1973 138 193 961 271 411 91 — 96 9,138 1974 133 178 922 209 393 95 — 89 8,653 1975 135 173 977 146 430 94 — 125 8,867 1976 138 162 987 184 441 95 — 154 9,404 1977 147 155 1,136 131 401 88 — 234 9,937 1978 168 140 1,164 108 429 80 — 262 10,273 1979 204 118 1,151 131 436 89 1 268 10,624 1980 245 87 1,228 154 387 75 1 282 10,713 — = None or negligible. 'Included with alfalfa meal and pellets, included with other animal meals. Source: Japan Feed Association, Shiryo Geppo (Feed Monthly), various issues. 76 Appendix table 9— Japan: Livestock inventories Hogs Breeding Layers Broilers J apan fiscal Under Over 6 months chicks Under Over year Total 6 months Total Sows Others Total 6 months 6 months — 1,000 head Million head--- I960’ 1,918 1,140 778 246 531 2 53 8 45 NA 1961 2,604 1,662 942 420 522 4 68 12 56 NA 1962 4,033 2,395 1,638 529 1,108 5 85 14 71 NA 1963 3,296 1,925 1,371 418 953 8 91 19 72 NA 1964 3,461 2,189 1,272 465 807 14 93 80 13 NA 1965 3,976 2,619 1,357 535 822 6 114 26 88 18 1966 5,158 3,456 1,702 698 1,005 6 109 28 81 22 1967 5,975 3,996 1,980 729 1,251 7 119 30 89 31 1968 5,535 3,793 1,742 651 1,090 7 133 35 98 35 1969 5,429 3,776 1,653 659 995 8 149 39 110 41 1970 6,335 4,422 1,912 816 1,096 9 161 43 118 54 1971 6,904 4,959 1,945 841 1,104 9 163 39 124 63 1972 6,985 5,087 1,898 853 1,045 10 154 33 121 68 1973 7,490 5,289 2,024 977 1,047 11 153 32 121 80 1974 8,018 5,878 2,140 1,009 1,130 9 152 31 121 89 1975 7,684 5,602 2,082 911 1,171 9 146 29 116 88 1976 7,459 5,478 1,981 962 1,019 10 147 30 118 93 1977 8,132 5,979 2,153 1,028 1,125 9 152 31 120 103 1978 8,780 6,474 2,306 1,093 1,213 9 157 33 124 116 1979 9,491 7,009 2,482 1,168 1,314 9 157 33 124 126 19802 9,998 NA NA 1,152 NA NA NA NA NA NA 1981 10,065 NA NA 1,150 NA NA NA NA 122 131 Dairy cows Beef cattle Japan fiscal Female Male Under Over Under Over Under Over Dairy year Total 2 years 2 years Total 2 years 2 years 2 years 2 years steers Horses Goats Sheep 1,000 head I960' 824 304 520 2,340 400 1,284 NA 655 NA 673 561 788 1961 885 321 564 2,313 311 1,349 NA 653 NA 618 520 677 1962 1,002 365 637 2,332 332 1,354 NA 646 NA 547 499 504 1963 1,145 416 729 2,337 359 1,309 NA 668 NA 471 464 389 1964 1,238 443 795 2,208 350 1,200 NA 658 NA 396 401 274 1965 1,289 430 859 1,886 395 919 NA 572 NA 322 325 207 1966 1,310 425 885 1,577 377 733 NA 466 NA 268 280 146 1967 1,376 462 914 1,551 362 700 NA 489 NA 240 246 113 1968 1,489 521 968 1 ,666 365 715 NA 585 NA 216 223 83 1969 1,663 565 1,098 1,795 390 749 NA 656 NA 190 198 64 1970 1,804 606 1,198 1,789 371 794 NA 624 NA 137 171 22 1971 1,856 611 1,245 1,759 375 714 368 116 186 124 160 26 1972 1,819 584 1,235 1,749 361 613 364 115 295 97 130 21 1973 1,780 567 1,213 1,818 343 577 335 93 444 79 137 17 1974 1,752 537 1,215 1,898 338 595 338 104 524 66 124 16 1975 1,787 552 1,235 1,857 340 609 332 101 476 43 111 12 1976 1,811 536 1,275 1,912 344 645 353 84 485 36 94 10 1977 1,888 564 1,324 1,987 351 642 366 96 531 31 82 11 1978 1,979 602 1,377 2,030 346 632 369 118 566 25 79 11 1979 2,067 620 1,447 2,083 340 623 374 116 629 22 71 12 19802 2,136 NA NA 2,227 NA 619 NA NA 749 NA NA NA 1981 2,104 NA NA 2,281 NA 620 NA NA NA 24 NA 16 NA = Not available. ’Inventories as of February of each year. 2Regular survey was not taken in 1980. Source: Ministry of Agriculture, Forestry, and Fisheries, Statistical Yearbook, various issues. 77 Japan’s Feed-Livestock Economy Appendix table 10— Japan: Formula feed production by livestock category Year Chick Layer Broiler Swine Beef Dairy Other Total 1,000 metric tons 1960 NA 1,734 586 NA 5 309 248 2,882 1961 627 2,360 140 465 11 403 90 4,096 1962 687 2,831 186 628 16 520 122 4,990 1963 869 3,365 296 875 36 640 120 6,201 1964 953 4,095 383 1,157 55 711 142 7,496 1965 793 4,064 456 1,773 78 803 183 8,150 1966 949 4,443 705 2,552 125 925 200 9,898 1967 898 4,713 795 2,423 234 1,067 193 10,324 1968 1,002 4,997 993 2,433 448 1,301 183 11,356 1969 1,076 5,464 1,401 3,100 600 1,521 199 13,362 1970 1,064 5,880 1,506 3,932 876 1,741 77 15,076 1971 934 5,894 1,745 4,032 1,203 1,812 74 15,693 1972 933 6,185 2,045 4,699 1,453 1,945 85 17,345 1973 854 6,063 2,196 5,155 1,835 1,907 74 18,084 1974 769 5,693 2,170 4,860 1,665 1,792 69 17,019 1975 829 5,694 2,315 4,538 1,544 1,833 65 16,818 1976 856 5,948 2,579 5,197 2,004 1,960 74 18,618 1977 875 6,130 2,925 5,597 2,154 2,115 81 19,878 1978 893 6,246 3,107 6,262 2,197 2,268 95 21,067 1979 905 6,324 3,302 6,911 2,536 2,350 109 22,438 1980 944 6,403 3,345 6,399 2,724 2,323 116 22,252 1981 980 6,492 3,358 6,257 2,652 2,295 117 22,159 NA = Not available. Source: Japan Feed Association, Shiryo Geppo (Feed Monthly), various issues. Appendix table 11— Japan: Barley marketed as a single ingredient Japan fiscal Barley year 1,000 metric tons 1970 647 1971 703 1972 765 1973 836 1974 897 1975 947 1976 1,054 1977 1,098 1978 1,097 1979 1,200 1980 1,285 1981 1,316 Source: Japan Feed Association, Shiryo Geppo (Feed Month- ly), various issues. 78 Appendix Tables Appendix table 12— Japan: Production of major livestock products Beef and Eggs, Pork, veal, Year in shell Chicken carcass Milk carcass 1.000 metric tons I960 547 NA 1961 728 NA 1962 780 NA 1963 851 NA 1964 982 176 1965 984 204 1966 1,063 240 1967 1,328 292 1968 1,415 328 1969 1,607 400 1970 1,734 490 1971 1,801 540 1972 1,794 622 1973 1,800 685 1974 1,799 725 1975 1,788 740 1976 1,859 824 1977 1,883 903 1978 1,965 1,005 1979 1,991 1,092 1980 1,999 1,128 1981 1,990 1,100 147 1,887 142 206 2,114 143 324 2,437 146 320 2,761 197 342 3,020 237 407 3,221 216 565 3,409 154 603 3,566 159 590 4,016 176 590 4,509 236 734 4,761 278 843 4,820 296 885 4,939 317 971 4,908 246 1,098 4,868 321 1,040 4,961 353 1,056 5,262 298 1,169 5,735 361 1,284 6,117 403 1,430 6,463 402 1,476 6,502 418 1,396 6,620 471 937 Bestsellers The U.S. Government Printing Office has put together a new catalog of the Government’s bestselling books. 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