Japan: Meat prices to rise as corn boosts feed costs

Japan, the world's biggest corn importer, will increase floor prices for domestic meat for a second time this year and boost subsidies for livestock farmers after prices of the grain soared to a record high. The floor price for locally produced pork will rise 5.3 percent to a 20-year high of 400 yen (US$3.74) a kilogram in July from 380 yen. The base price for beef will climb 3.2 percent to a 12-year high of 815 yen from 790 yen, the Ministry of Agriculture, Forestry and Fisheries recently stated. Subsidies would rise 73.8 billion yen, it said. The ministry raised the floor levels in April for the first time in about three decades. Japan's farmers depend on imports for almost all their feed grains and soaring costs have forced some producers out of business. Feed costs also increased as freight rates for grain cargoes surged on rising demand, a shortage of ships and surging fuel prices. The increase in Japan's floor prices in April was the first for pork in 31 years and the first for beef in 27 years. The government can buy meat from the wholesale market if prices fall below the support level, providing protection for farmers. Corn is the biggest ingredient in Japanese compound feed used for livestock, and soybean meal is the second-largest. Compound feed prices in Japan rose to an average 62,800 yen per metric ton this quarter, up 18 percent from a year earlier, according to the agriculture ministry. The government has subsidized part of the increase in feed costs to support farmers. Still, costs to farmers rose 17 percent from a year earlier to 52,300 yen per ton on average in the quarter, according to the ministry.