USGC explores growth in mature Japanese market

By U.S. Grains Council | November 25, 2014

Japan is a mature market: a high-income country with a stable and aging population; an excellent, high quality diet; a sophisticated food production and marketing system; and among the highest food safety standards in the world.

“A mature market is a challenge,” said Tommy Hamamoto, U.S. Grains Council director in Japan.  “We work hard to serve our long-time, loyal customers, and Japan is still the top U.S. export market for corn. But we are also looking for new value-added products and new opportunities. We are discussing some of these new ideas with Japanese livestock producers, including expanded exports.”

While Japan has a well-deserved reputation for high quality and food safety, some other countries in the region are still struggling to raise standards. Two years ago, the Council collaborated with the United States Department of Agriculture’s Foreign Agriculture Service office in Tokyo on a study, Food 2040, that projected great potential for Japan as a production platform for other East Asian markets. Given Japan’s heavy reliance on imported feed ingredients, this is an opportunity for U.S. coarse grains producers to support a growing Japanese livestock industry.

“The Council supports U.S. corn exports in all forms,” Hamamoto said. “If Japan becomes an export platform for regional markets, we want to supply the corn.”

Ethanol is another new opportunity. In partnership with the Renewable Fuels Association and Growth Energy, the Council has opened a strategic discussion with key industry and government officials about the future role of biofuels in Japan’s energy mix. While it is not yet a large consumer of ethanol, Japan does have a small pilot program on Okinawa, currently limited to about 100 service stations. Early conversations have indicated interest in further exploring the potential.

In the meantime, Japan remains the top destination for U.S. corn exports, and Japanese livestock producers remain critically concerned with the reliability of foreign suppliers, including the United States.

“Japan depends on food imports more than other major country,” Hamamoto said. “There is always concern about possible disruptions due to war, or climate change, or major market shifts in other part of the world. While Japan continues to rely heavily on U.S. corn, it is important to maintain a balance with domestic agricultural production. The Council’s job is to constantly reassure our long-time good customers that we will always be there for them.”