Some interesting tidbits from the various presentations we heard:
Upcoming Election Could Lead to New Initiatives
There is an election July 21 for the Upper House of Japan's two-house Diet (their legislative body). Japan is a parliamentary democracy. The Lower House, which is in the hands of the ruling party, is the most powerful of the two; but the Upper House, which has been in the hands of the opposition party, has stifled the leadership's economic, fiscal and growth initiatives. There is every indication, however, that the ruling party will gain control of the Upper House, thus enabling proposed legislation to become a virtual slam dunk through both houses of the Diet.
|The Tokyo metro area has a|
population of more than 30 million.
Japan has suffered through two decades of economic doldrums and has been a bit forgotten as it has fallen in the shadow of China's growth. Still, Japan is the third largest economy in the world. Japan has $47,000 per person GDP, compared to $6,000 per person GDP in China; so the purchasing power in Japan is enormous—and they are used to spending dollars to get what they want.
The March 2011 Earthquake & Tsunami
The March 11, 2011 tsunami caused over $30 billion in damage and took more than 64,000 acres of agricultural land out of production. Some 315,000 refugees remain—and about 38% of the farmland has been restored. Cost for reconstruction in FY2013 alone is $44.7 billion.
Japan was just crawling out of its economic hole when the earthquake and tsunami hit in 2011. One significant outcome of the disaster: Prior to the incident, 30% of Japan's energy was generated through nuclear power; since the disaster, that has fallen to less than 1 %—so Japan finds itself paying big yen to import oil and natural gas.
Additionally, the public debt in Japan is 235% of GDP, the highest in the world. There has been a slow but steady population decline. Japanese women have 1.4 children on average. By 2050, more than 38% of the population will be over age 65.
|Japanese consumers are affluent and are willing to|
pay for what they want, but they are also concerned
about safety and peace of mind.
Food self-sufficiency is a huge concern in Japan—and several recent food threats, including the nuclear disaster, have done nothing to quell those fears. Japan is the #1 customer for U.S. corn, pork, feeds, frozen vegetables, and fresh citrus. As noted in an early post, they will also soon regain their position as the #1 customer for U.S. beef.
As U.S. beef exports to Japan rise back to previous levels and beyond, we will need to keep an eye on the "safeguards" Japan has in place. If imports reach theses safeguard levels, tariffs increase significantly.
However, these safeguard levels are programmed to rise steadily over time.
|Mark Jagels (L) and Dale Spencer stand|
under a large ad for U.S. Beef
placed in Shinagawa Station by
USMEF. The headline says: "People
who appreciate great food love
- Japan remains a strong market dependent for imported food.
- Japan is a relatively affluent population with diverse palates, not a stagnant market.
- Japanese consumers are willing to pay a higher price for quality and convenience.
- They are especially interested in "Anzen" and "Anshin"—safety and peace of mind.