While most Asian economies are well on the road to recovery, the Japanese economy has remained relatively sluggish. Japan’s weak economy and subdued consumer demand, however, have proven to be positive for the country’s broiler producers.

Latest figures from the USDA’s Foreign Agricultural Service indicate that Japan produced some 1.282 million metric tons of broiler meat in 2009, more than previously forecast and a 2% increase on 2008.

The driver behind this growth has been an increase in the average weight of birds slaughtered, which has been increasing since the start of the decade. Additionally, despite a slow start to the year, chick placements increased over the second half of the year, and this increase helped to push prices lower for domestically produced meat. Total output for 2010 is predicted to be as similar levels to that recorded for 2009.

Difficulties in the economy have meant that consumers have shied away from more expensive meats, such as beef and lamb and, by the end of 2010, total broiler meat consumption is expected to be some 1% higher in comparison with 2009 at 2.01 million metric tons.

Low market prices for chicken, which accounts for 90% of the poultry meat consumed in Japan, are thought to have been the key element in sustaining the relatively high level of broiler consumption. Sales at retail level increased by 8% during the first half of the year, partly driven by a 2% reduction in prices, but also the result of consumers looking to eat out less.

At food service level, sales have been reasonable this year, and some fast food concerns have actively promoted chicken menus, taking advantage of low supply costs. The country’s major hamburger chain, for example, has been promoting a chicken menu this year, using pre-cooked products sourced from China and Thailand.

A similar outlook is expected for the Japanese market in 2011, with deflation, high levels of unemployment and weak consumer demand continuing. This is expected to continue to benefit the poultry industry as price and value-conscious consumers spend cautiously.

Consumption levels of broiler meat next year expected to be broadly similar to those of 2010, with the share of supplies coming from home producers and from overseas remaining broadly the same as those of this year.

Domestic output is expected to be in the region of 1.28 million metric tons, however, by the year end, frozen stocks are expected to have been run down to some 106,000 metric tons, continuing the run-down in inventory that has been evident this year.

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Imports  

Japan’s imports of poultry meat are expected to end the year some 13% higher at 730,000 metric tons.

Amongst the factors contributing to this increase have been the strength of the Yen, lower prices for leg meat imports from Brazil and competitively priced prepared and processed products originating from China.

Imports of broilers from the US are reported to have increased by 67% this year. The surge in demand has been attributed to a major fast food fried chicken chain using US broiler cuts, as well US product being able to fill the gap left by the ongoing bans on raw poultry from China and Thailand due to HPAI. Additionally, the US has had surplus stocks due to its trade dispute with Russia.

Close to half of Japan’s total imports are “prepared products of broiler meat”, mainly supplied by Thailand and China. Imports of incooked broiler meat from the two countries have been banned due to persistent Highly Pathogenic Avian Influenza (HPAI).

While domestic production supplies the majority of the retail sector, the food service sector uses large quantities of imported raw bulk cuts, primarily from Brazil. The origin of supplies to Japan is changing, however. The US, which has been a major supplier particularly of product for processing once it enters the country, has been losing ground to more competitive producers.

While HPAI concerns remain, for example, with product sourced from China, food safety and contamination are no longer an issue and these has allowed Japanese companies to purchase large amounts of cheaply-priced processed chicken from the country.

While Japan’s consumers prefer to consume boneless leg meat, the abundant supply of domestically produced breast cuts has seen some retailers promoting this cut as a “healthy option”. Nevertheless, most domestically produced breast meat is purchased by processors to make ready-to-eat foods that are sold at a substantial discount.