On-farm Corn Consumption Declines in Japan
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Industry reports estimate the MY2022/23 harvested area increased 85 percent from the previous year to 1,839 hectares. Based on average yields, FAS/Tokyo estimates production at 11,000 metric tons, up 70 percent from the prior year. Post attributes production expansion to high global Corn prices and support payments from the Ministry of Agriculture, Forestry and Fisheries (MAFF), incentivizing farmers to switch production from rice to Corn. Farmer groups anticipate expanded grain Corn production in MY2023/24 as it requires fewer labor hours than rice. Processors use domestic grain Corn to produce formula feed, snacks, and drinks.
FAS/Tokyo forecasts Japan’s MY2023/24 Corn planting area and production to increase to 2,400 hectares and 14,000 metric tons, respectively, based on projected shifts from rice to grain Corn production. Food, Seeds, and Industrial (FSI) Corn consumption is forecast to recover to 3.38 million metric tons in MY2022/23 and to 3.43 million metric tons in MY2023/24 as Japan returns to regular economic activity. Japan did not lift pandemic-related, inbound international tourism restrictions until October 2022.
Corn used to manufacture Cornstarch accounts for approximately 90 percent of Japan’s FSI Corn consumption. Processors used the remaining FSI Corn in flakes, grits, meal, flour ethyl alcohol, and distilled alcoholic beverages; annual demand for these products is stable at around 180,000 metric tons. MAFF reported MY2021/22 Cornstarch production increased 0.2 percent, reflecting increased demand for beer and cardboard production.
A gradual recovery of Cornstarch demand is forecast, including for sweetener production, in the next two marketing years based on projected demand from the Hotel, Restaurants Institutional (HRI), and tourism sectors. According to AgFlow data, Japan imported 1.3 million tons of Corn from Brazil in January-February, followed by the US (0.5 million tons), Ukraine (55,950 tons), and Russia (17,000 tons).
Feed Corn Consumption in Japan
FAS/Tokyo projects MY2022/23 feed Corn consumption to decrease 1.7 percent, to 11.5 million metric tons, from the previous marketing year, reflecting declines in poultry and dairy cattle inventories, as well as an increase in feed rice supply. FAS/Tokyo expects overall MY2022/23 formula feed production to contract by approximately 2 percent as Japan is experiencing its most significant ever Highly Pathogenic Avian Influenza (HPAI) outbreak, resulting in the culling of roughly 4.8 percent of poultry inventories.
Layers accounted for 94 percent of poultry affected by HPAI and consume approximately 28.5 percent of all feed Corn in formula feed. Based on current conditions, the industry expects it will take roughly one year to fully recover to average layer production. In addition, Japanese dairy farmers are reducing dairy herds because of weak milk demand and high feed prices, which has generated operating losses. Dairy cattle consume roughly 12 percent of feed Corn in formula feed.
MY2023/24 feed Corn consumption is forecast at 11.6 million metric tons, up 0.9 percent from the previous marketing year. FAS/Tokyo anticipates demand will increase as layer inventories gradually recover in MY2023/24. Experts view robust broiler, swine, and beef cattle production in MY2022/23 and MY2023/24 based on bullish domestic demand for chicken and pork and a growing Wagyu beef export sector.
Annually, Japan produces 24 million tons of formula feed. Due to high Corn prices, feed mills substituted some Corn with wheat and rice in feed rations in MY2021/22, resulting in a 230,000 metric ton decrease in Corn used in formula feed production. However, Corn still accounted for 47 percent of the total formula feed by volume in MY2021/22. According to MAFF, consumption of Corn for on-farm feed has been trending down and fell to 170,787 metric tons in MY2021/22, down 11 percent from the previous year. High Corn prices accelerated the decline in MY2021/22. Post expects consumption of on-farm feed Corn to decline in the next two marketing years as farmers shift to formula feed for convenience.
Other sources: USDA
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