Increased demand for ethanol is fueling a rare harvest rally in the corn market. And while that's welcome news for growers, it's not a positive development for livestock producers. Increased ethanol production also yields large amounts of dried distillers grains, or DDGs. So, cattle producers are considering what higher rations of the byproduct will do to their feed efficiency -- and ultimately -- beef quality. Since hogs will only tolerate a small amount of DDGs in their feed before quality declines, pork producers likely will find themselves competing with the ethanol industry and paying more for corn. This week though, the big news in the livestock sector occurred -- once again -- in Japan.
Japan announced this week it will allow in approximately 900 tons of frozen U.S. beef. According to the Agriculture Ministry, the frozen meat has been held at customs since December 2005, when Tokyo reinstated a ban on American imports following the discovery of banned cattle parts in a veal shipment from a New York based company.
Japanese officials say they will inspect the stored U.S. beef for mad cow disease and will allow it to be sold if it meets safety requirements. The inspections are slated to start this week and are expected to take one month.
Japan recently announced it would conduct "snap" inspections of meat plants in the U.S., starting as soon as November. The inspections would work like this --Japanese inspectors would be allowed to participate in unannounced investigations that the U.S. government conducts on its meatpackers, concentrating on top meat-processing facilities like Tyson.
Japan initially banned imports of U.S. beef in December 2003, after the first case of mad cow disease was found in a U.S. herd. Before the ban, Japan was the top U.S. beef importer, buying 240,000 tons of American beef totaling $1.4 billion in 2003. Right now, only meat from U.S. cattle under the age of 21 months can be imported. But, the U.S. hopes to change this to 30 months which is the international standard.