Nation is an industrial giant, but its grain production is small and imports are needed to feed the population.
“Despite a 1% — or 800 hectare — decrease in the planted area, production in Hokkaido increased 31% to 723,800 tonnes thanks to good weather, marking a record yield of 5.9 tonnes per hectare,” the report said. “Production in the remaining prefectures declined 10% to 272,400 tonnes due to high moisture during the grain-filling period, despite a 1,300 -hectare increase in the planted area.
“Since wheat is produced as part of a crop rotation in Hokkaido, normally accounting for 60% of national wheat production, a sizable increase in the planted area is not possible despite increasing demand for domestic wheat in recent years. Thus, the planted area is expected to remain unchanged in 2016, and the production volume is forecast to decline 17% assuming average yield.”
The International Grains Council (IGC) puts Japan’s total grains imports at 22.7 million tonnes in 2016-17, up from 22.1 million the year before. The figure includes 5.8 million tonnes of rice imports, up from 5.6 million the year before. Maize imports for 2016-17 are put at 10 million tonnes, up from 9.5 million the year before. Barley imports for 2016-17 are forecast at 1.3 million tonnes, up from 1 million the previous year. The country is also forecast to import 750,000 tonnes of sorghum, up from 673,000; 50,000 tonnes of oats, up from 48,000; and 30,000 tonnes of rye, up from 19,000.
Japan’s wheat imports for 2016-17 will include an unchanged 200,000 tonnes of durum, according to the IGC.
Japan is big enough to register in the IGC’s figures for rice production with the 2016-17 crop put at 7.9 million tonnes, up from 7.6 million the year before. It is also forecast to import 700,000 tonnes of rice in 2016-17, unchanged from 2015-16. Japan’s rice exports are steady at 100,000 tonnes
In 2016-17, Japan will import 3.1 million tonnes of soybeans, down from 3.3 million the year before. Soymeal imports are forecast at 1.8 million tonnes, up from 1.7 million the year before. Imports of rapeseed are forecast unchanged at 2.2 million tonnes.
Wheat consumption
According to a report published last year by Agriculture and Agri-Food Canada, Japan is the 5th-ranked bakery products market in the world with $26.4 billion of retail sales in 2014.
“Three of the top five international bakery companies in the world in 2014 sold products in Japan,” it said. “These three companies were the number one ranked Mondel?z International Inc., the number three ranked Kellogg Co., and the number five ranked Yamazaki Baking Co. Ltd. Ninety-five percent of Yamazaki Baking Co. Ltd. bakery sales were in Japan (Euromonitor International, 2014).”
Milling sector
Nisshin Flour Milling Inc., a subsidiary of Tokyo-based Nisshin Seifun Group Inc. (NSGI), is Japan’s largest flour milling company.
“Our goal is to be the world’s number one flour milling company,” Nisshin says on its website.
The company has been in the process of building an international flour milling network, with bases already operating in Canada, Thailand, the U.S. and New Zealand.
It acquired the Rogers Foods, Ltd. milling business in Canada in 1989. In 2012, Nisshin acquired Miller Milling Co., which at the time operated flour mills in Fresno, California, U.S., and Winchester, Virginia, U.S., and in February 2013, it purchased Champion Flour Milling Ltd. from Goodman Fielder for NZ$51 million.
In May 2014, Nisshin’s Miller Milling business acquired four additional mills — the Los Angeles, California, U.S., flour mill of Horizon Milling LLC and the Oakland, California, U.S., Saginaw, Texas, U.S., and New Prague, Minnesota, U.S. mills of ConAgra Mills. In addition to turning Nisshin into a top U.S. flour milling company, the $215 million (about 22 billion Japanese Yen) transaction was pivotal in allowing an even larger transaction to move forward — the creation of Ardent Mills through the combination of the remaining milling operations of ConAgra Foods, Inc. and Horizon Milling LLC.
Nippon has seven flour mills throughout Japan, with one in each of Yokohama, Chiba, Nagoya, Kobe-Konan, Osaka, Fukuoka and Otaru. Large-scale coastal mills currently account for 80% of its production capacity.
Showa Sangyo flour has three plants, at Kashima, Kobe and Funabashi.
The Nitto Fuji flour milling company has three plants. They are in Tokyo, with a capacity of 1,046 tonnes per day, in Shizuoka, with a capacity of 522 tonnes per day, and in Nagoya, with a capacity of 202 tonnes per day, making a total of 1,770 tonnes per day.
The attaché explained in a March report how the Ministry of Agriculture, Forestry and Fisheries (MAFF) controls supplies of imported wheat to the millers.
“MAFF purchases different types of food quality wheat, mainly from the United States, Canada and Australia, to best meet the needs of Japanese users,” the report said. “MAFF controls both producer and resale prices of domestic wheat, as well as the resale price of imported wheat. MAFF buys imported wheat at international prices and sells it to domestic flour millers at a markup.
“As a result of the Japan-Australia Economic Partnership Agreement, effective Jan. 15, 2015, imports of Australian feed wheat and feed barley have been liberalized so that companies can negotiate prices and import directly from Australia. To date, there have been no feed wheat imports from Australia since 2013-14.”
Feed Consumption Down
The USDA attaché explained in a June report that, “consistent with the declining and aging Japanese population, overall food consumption had been trending down, and thus the livestock numbers and feed production had gradually declined in recent years.”
However, a recovery in swine numbers after an outbreak of Porcine Epidemic Diarrhea (PED) virus in 2014, and a small increase in poultry population due to strong demand for poultry meat, triggered a 1% rise in compound feed production in the first half of 2015-16 (October-March).
Japan maintains a feed price stabilization program that consists of a combination of a MAFF subsidy and an industry fund to help absorb sudden surges in compound feed prices, the report said. It is activated when the import cost of ingredients in a particular quarter exceeds the average import cost of ingredients in the previous year. No compensation payments were made from April 2014 to March 2015, reflecting lower prices of corn, soy meal and freight.
Japan’s consumers remain staunchly opposed to the production of genetically modified foods. Earlier this year Japan suspended imports of U.S. white wheat, following the discovery of an unapproved GM variety. MAFF resumed purchases on Sept. 1.
