Japan's poultry production continues to grow

Japan's chicken and egg producers are continuing to respond to favorable market chicken, with demand favoring high-value products.

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iryouchin | iStockPhoto.com
iryouchin | iStockPhoto.com

Poultry meat production in Japan is estimated to have expanded by 2% in 2018, and a similar figure is expected for 2019.

For the first 10 months of the year, Japan’s production of broiler meat rose by 2.1%, according to data from the Ministry of Agriculture, Forestry and Fisheries (MAFF), while consumption grew at a faster rate of 3.8%.

The Japanese economy has been continuously expanding since 2012, its longest run in post-war history, although growth this year is expected to be only 0.7%, according to the Organization for Economic Co-operation and Development (OECD). The country’s broiler industry has followed the same pattern, with expansion recorded in each year after 2011’s contraction in output.

Several factors are reported to be contributing to this sustained demand for poultry meat.

Various sources highlight the ongoing interest in the country for healthy eating, and chicken meat responds to this interest.

Where younger consumers are concerned, demand is being fostered; innovative product development is often cited as growing interest in chicken meat consumption. Where older consumers are concerned, there is an ongoing move away from fish to chicken meat.

The country’s aging population and continued urbanization have also contributed to purchases of processed as opposed to raw chicken, and there is a general trend away from dark meat to white meat.

More generally, despite weak growth in the economy in 2018 and 2019, and an expected slowdown in neighboring China, employment in Japan remains strong and this has resulted in rising wages to support domestic demand.

While the poultry industry ended 2018 once again in positive territory, with the last quarter described as “relatively strong,” performance during the second half is thought to have come in slightly below that of the first. For the first five months of 2018, official figures reveal that output expanded by 3%.

Yet as 2018 drew to a close, record high prices for poultry meat were recorded as stock levels were drawn down. The first half of 2018 also witnessed particularly strong imports, and these were drawn down during the second six months, reports Rabobank, which also highlights a change in type of product imported. While imports of raw meat were significantly down during the last quarter, processed meat imports rose by 12%.

Japan Broiler Production 2010 2018 1

With the exception of 2011, Japan’s broiler industry has been expanding since the since the start of the decade.

While demand patterns for meat are changing in the country, changes are also taking place on the supply side. The local industry is becoming more consolidated, with smaller players continuing to exit the market and their market share being taken up by larger concerns. The U.S. Department of Agriculture Foreign Agricultural Service notes that this has resulted in an increase in average carcass weights over the past decade, and increasing share of production comes from technologically advanced operations.

Chicken meat imports, exports

Over the first 10 months of the year, import levels remained at similar levels to those preceding years, between 400,000 and 500,000 tons per year, with the largest supplier remaining Brazil, MAFF reports. The last quarter, however, saw imports decline.

The second major supplier to Japan is Thailand, which is expected to become an increasingly important suppler, and the country is reported to be considering taking product from some areas of Russia.

Where exports are concerned, the avian influenza outbreak that emerged in 2017 was quickly contained and had little impact. That year, by value, the country’s broiler meat exports were still 15% higher at JPY1.98 billion (US$18.3 million), while at 10,004 tons, by volume exports rose by 10%. For the first 10 months of 2018, however, the value of exports contracted by 1%, while volumes were 4% lower. For 2019, the industry has an export target of 14,000 tons of broiler meat.

Egg production

Egg producers have enjoyed strong prices over the past couple of years and responded through expanding production. In 2017, the industry produced 2.16 million tons of eggs.

Imports account for 5% of the eggs consumed in Japan, however, 90% of egg imports are in the form of powder. In 2017, imports of egg whites rose by 20% as stability returned to prices after difficulties in international markets.

Japan has recorded a particularly strong couple of years where egg exports are concerned. Exports for 2017 rose in value terms by 20% to stand at JPY1.02 billion, while the volume of eggs exports expanded by 20% to reach 3,891 tons.

This was followed by an even more impressive performance over the first 10 months of last year, with the value of exports rising by 48%, compared with the same period the year before, and volumes up by 50%. For 2019, egg exports are forecast to reach JPY2.6 billion, or 10,000 tons.

Condolidation Japanese Egg Production 2

Between 2017 and 2018, the number of egg farms in Japan decreased by 150, with the biggest losses being recorded among smaller producers.

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