Japan’s national legislature, called the Diet, approved a trade deal Dec. 3 that the U.S. and Japan agreed to earlier in the year. The deal would lower tariffs on American beef and other agricultural exports to Japan.
Scott Brown, University of Missouri ag economist, says the lower tariffs mean American ag products are cheaper in Japan, which should provide a big boost for the ag industry, in particular cattle markets.
“It seems to me that this might be the big win in 2019 for the cattle industry,” he says.
Brown says the deal’s approval will likely mean export growth in 2020. The deal takes effect at the start of the new year.
Japan is a very important market for U.S. agriculture, Brown says.
“I’d say it’s a top-two market for us, and from a value standpoint it’s No. 1,” he says.
U.S. farmers are still waiting to see if Congress will approve the U.S.-Mexico-Canada Agreement trade deal. Brown says if it doesn’t happen before Christmas or right after the first of the year, he is doubtful it will get done in an election year.
But the Japan deal’s approval was a big step forward for agriculture and exports.
“I think this is the most important one for us in 2020 and can help prices right away,” Brown says.
He says while the USMCA would maintain important access for beef producers, the Japan deal has a lot of potential for new growth for beef exports.
Brown says there are benefits for pork producers as well, although he is awaiting more information.
“I think we’ll get a lift on the pork side as well,” he says. “I’ve seen less detail there.”
Increasing exports to China will be key for pork producers in 2020, Brown says.
Ag groups weighed in on the trade deal with Japan, voicing their support.
“With the U.S.-Japan trade agreement now approved by the Japanese Parliament, the U.S. beef and pork industries look forward to expanded opportunities in Japan, which is already the largest value destination for U.S. pork and beef exports,” U.S. Meat Export Federation president and CEO Dan Halstrom says. “This agreement is one of the biggest developments in the history of red meat trade, as no international market delivers greater benefits to U.S. farmers and ranchers, and to the entire U.S. supply chain, than Japan.”
Halstrom also thanked U.S. President Donald Trump, the USDA, trade negotiators and Japanese Prime Minister Shinzo Abe.
National Cattlemen’s Beef Association president Jennifer Houston says the deal is good for cattle producers and Japanese consumers.
“There's just no other way to say it: This is a tremendous victory and a great day for America's beef producers and Japanese consumers,” she says. “Japan is the No. 1 export market for U.S. beef, and for many years it has been a top priority of NCBA to remove tariff and non-tariff trade barriers that have prevented American beef producers from meeting Japanese consumer demand for safe and high-quality U.S. beef. This agreement levels the playing field and opens the door for U.S. beef producers to meet consumer demand in Japan.”
Brown says the deal provides a boost for livestock producers heading into 2020.
“This is good news for the holidays,” he says.