Japanese demand for Australian beef may increase after radiation was found in domestic meat and amid concern that cesium leaks from the crippled Fukushima Dai-Ichi nuclear power plant may spread further, according to Australian Agricultural Co. Ltd.
“We’re expecting to see better demand out of Japan as they move away from their own herds,” chief executive officer David Farley said on a conference call today. That follows a boost in demand for beef after radiation was detected in Japan’s seafood in March, he said.
Cattle with unsafe levels of cesium were detected in four prefectures, the Japanese health ministry said July 23. The animals were fed tainted straw during a feed-supply shortage after the March earthquake and tsunami caused the reactor meltdowns at the Fukushima plant north of Tokyo. Supermarkets including Japan’s biggest, Aeon Co., said the beef was sold in Tokyo and other cities.
As radiation is found in domestic beef, we see rising demand for clean, quality meat, Farley said. “Australia itself should be well-positioned to meet their extra demand.”
More than 2,600 cattle have been contaminated, Kyodo News reported July 23, after the Miyagi prefectural government said 1,183 cattle at 58 farms were fed the tainted hay before being shipped to meat markets. Some of the hay was found to contain as much as 690,000 becquerels a kilogram, compared with an official safety standard of 300 becquerels. The government banned cattle shipments from Fukushima on July 19.
Still, a strengthening Australian dollar may limit any boost to sales as imports from other countries including the U.S. appear cheaper, Farley said.
“It’s interfering with our ability to compete for the demand,” he said. “The U.S. has increased exports to Japan 53 percent just this year, based off dollar value only.”
The Australian currency has climbed 6.8 percent against the dollar since March 1, according to Bloomberg data.
In the four weeks ended July 14, export sales of beef rose 51 percent from a year earlier with Japan buying about 4,200 metric tons (9.2 million pounds), government data show. U.S. exporters have shipped 1.09 billion pounds in the five months ended May 31, up 27 percent from a year earlier.
“Global demand, across the board, is in pretty good shape,” Farley said.“ Where we’re competing against the other proteins of chicken, hogs and fish, red-meat protein in the big sense is still competitively cheap compared to the others.”
The forecast for increased demand for Australian beef came as the company reported a first-half net loss of A$12.6 million. Shares in Australian Agricultural dropped 1.4 percent to A$1.39. source