Minimal 2021 growth at best for Japan’s broiler industry

Rising costs, ongoing coronavirus restrictions and mass culling of birds conspire to make 2021 a year of minimal growth for the Japanese broiler industry.

Clements 90x90 Headshot Headshot
Izakaya restaurants have been altering their product offerings to maintain trade but COVID-19 has hit the Japanese restaurant sector badly. | JohnnyGreig |iStock.com
Izakaya restaurants have been altering their product offerings to maintain trade but COVID-19 has hit the Japanese restaurant sector badly. | JohnnyGreig |iStock.com
Getty Images

Poultry meat output in Japan is expected to end the year broadly flat. While estimates vary, with some slightly more positive than others, the sector is predicted to produce 1.77 million metric tons (MT) in 2021.

The Japanese economy shrank more than expected during the first quarter of 2021, with dining out among those areas hardest hit as the government introduced new restrictions to control new COVID-19 infections.

For the year to March 2021, Reuters reports that Japan’s economy shrank by 4.6% and, despite at a pick up in the last three months of 2020, the first quarter of 2021 witnessed a contraction of 5.1%. The decline is mainly attributed to shrinking private consumption and there are fears that it continued into the second quarter.

Production issues

While the Japanese poultry industry has had to contend with the impact and restrictions associated with COVID-19, the novel coronavirus has not been the only disease to impact it negatively. Highly pathogenic avian influenza has seen the industry forced to cull a record number of birds.

The latest outbreak hit in November 2020, spreading to 18 prefectures, including two major centers of poultry production. Non-governmental organization Nippon Communications Foundation notes that, as of early May 2020, 9.87 million chickens and ducks had been culled, significantly up on the previous record of 1.83 million.  A month earlier, the U.S. Department of Agriculture Foreign Agriculture Service (USDA FAS) reported that 0.7% of the country’s broiler population had been culled between November 2020 and February 2021.

FAS also notes that both the broiler and layer industries are also having to cope with higher feed costs, which are likely to significantly impact production in 2021.

Consumption

Like much of the world, Japanese consumers have been cooking at home more. However, as the economy begins to recover, they are increasingly looking to prepared and take out foods. FAS notes that fried chicken sales in the country have increased, with KFC, the largest fried chicken chain in Japan, announcing a sales increase of 7.6% over the year to February 21. However, since then a third state emergency has been declared in the country.

Izakaya restaurants, which purchase significant amounts of chicken, have struggled since the spring of 2020, however, several chains are now altering their business models to include more take out options and new products such as chicken burgers.

A similar picture has emerged in the country’s convenience stores, which have also altered their product offerings to include more in-store cooked foods and snacks aimed at families eating at home. Convenience stores are major stockists of imported chicken.

Japan’s vaccination roll-out has been slow compared to many countries but as the COVID-19 is brought under control foodservice demand should begin to recover. The government hope that by November, anyone who wants to be vaccinated will have been vaccinated.

The Olympic Games, due to take place in Japan in late July and early August 2021, may offer some uplift to consumption, but perhaps not as much as would normally be expected.

Imports

FAS forecast that imports will reach 1.01 million metric tons (MT) in 2021, up by half a percent on 2020. The higher price of domestically produced chicken is expected to encourage processors to look to for more imported inputs.

Weak foodservice demand during the pandemic pushed Japan’s chicken imports sharply down, particularly those of prepared chicken from the country’s two main suppliers Thailand and China.

Japan remains the world’s largest importer of chicken meat and recently agreed to source chicken meat from the UK and recognized more meat products produced in the Philippines.

Page 1 of 1576
Next Page