By TIM ALEXANDER
Illinois Correspondent

ST. LOUIS, Mo. — A report issued by Rabo AgriFinance, a provider of financial services for agricultural producers and agribusinesses, estimates what implications the earthquake, tsunami and subsequent nuclear concerns facing Japan will have on U.S. agriculture.

The report, published April 7, details the impact on six segments of Japan’s agricultural industry in the aftermath of one of the world’s most catastrophic events. “The situation in Japan is still very fluid with many unknown factors,” according to the release by Rabobank, the company that owns Rabo AgriFinance.

Among its bullet points, the report claims that based on the current weakness of the U.S. dollar compared to Australia’s, the U.S. market “would be first in line to supply additional beef exports.”

Since Japan imports most of its corn from the United States, downward pressure on prices is expected and little lasting impact on worldwide grain markets is anticipated, the report stated. Grain demand from Japan is down slightly, according to Mark Lambert, a spokesman for the National Corn Growers Assoc. (NCGA), who added that conditions could change.

“At some point there has to be some sort of an impact. There are large parts of the country that aren’t functioning properly,” said Lambert. “A lot of what they buy is for food processing and livestock feed. Those areas do not seem to be hit very hard. I think they have made it a priority to ensure that there is not a disruption.”

According to the report, at this stage the impact on the U.S. dairy industry “appears unlikely to be great.”

Since a significant amount of Japan’s pork, poultry and beef industry is located near impacted regions, total production losses could total between 70,000-350,000 tons, according to the study. Power outages resulted in widespread losses of stored meats, the report detailed. Around 15 percent of Japan’s compound feed industry capacity was damaged, according to Rabobank’s study (the country is a major importer of wheat).

In conclusion, the report cautions the consequences of the events in Japan will stall its exports and lead to a rise in imports.

“While the full impact of the earthquake and radiation are not yet
understood ... the report projects that food safety concerns and supply shortage will limit exports and cause imports to rise,” stated Sarah Kotell, public relations director for Rabobank Food Agribusiness Research & Advisory.
While analysts consider the financial ramifications of the tragedy in Japan, many U.S. agricultural commodity organizations are rallying to do whatever they can for Japanese citizens.

“A lot of state organizations have been providing corn to sell and donate, and a lot of meat donations have been going into food banks” destined for Japan, Lambert said. “The thing they need most is protein.”

As of April 4, Nebraska farmers delivered more than 4,600 bushels of grain that sold for a donation of more than $31,000, to support Red Cross efforts to help those affected by the tsunami and earthquake in Japan and the Pacific.
Farmers can continue to support the Nebraska Corn Growers’ initiative through July 30.

The full report, Japan Earthquake: Magnitude of Impact on Food and Agriculture, may be obtained by contacting Lisa Verbeck, Rabo senior communications manager, at 319-575-5445.