Supply/Demand Basics

  • Corn use: feed 75%; starch 24%; other food use 1%.
  • #2 import market for U.S. corn, U.S. barley and U.S. sorghum in MY 2017/2018.
  • Feed grain imports gradually declining to 12-15 MMT/year from 16 MMT/year.
  • Japan imported 560 TMT of U.S. DDGS in MY2017/2018.
  • Dry milling sector is #1 end-user of hard endosperm corn; U.S. market share 100% in MY 2017/2018.

Country Overview

  • Population / growth: 126.7 million / -0.2%
  • Urban % / growth: 94.3% / 0.15%
  • GDP / growth: $5.4 trillion / 1.5%
  • GDP per capita: $42,700
  • Large government debt and stagnant economy; highly subsidized, small agricultural sector; dependent on imported raw materials and fuels.
  • Prime Minister Abe holds the Prime Minister position for the seventh year, the second longest after the war.

Trade and Market Share Issues

  • Aging population and changing consumer preferences mean little growth in total food demand.
  • High health consciousness with relatively high income has led to demand for health- oriented, value-added foods.
  • Still committed to buying from U.S. (volume, reliability, origination investments), however Japanese industry beginning to diversify sources of feed ingredient imports.
  • 216 million gallons of ethanol blended as ETBE, at 2% blend rate. The U.S. can hold up to 44% market share.

Policy Issues

  • U.S.-Japan bilateral trade agreement should be taken as a trigger to revitalize agricultural policy and trade establishment.
  • Biotech approval system, while functioning, may not have capacity to handle accelerating applications.
  • Japan’s biofuel policy has allowed U.S. bioethanol since 2018.There is a ceiling for the U.S. bioethanol market share at 44.4% due to GHG emission reduction requirement.