The contingent quickly learned that though dwarfed by China—its communist cousin—democratic Taiwan ranks in the top six markets for U.S. agriculture products. Outside of the U.S. and Canada, it’s number one in consumption per capita of those same exports.
The Taiwanese people hold a positive image of U.S. products. A heavy "western" influence is apparent throughout the capital city of Taipei. Hasmore Ltd. restaurants are easily spotted. The famed Ruth’s Chris Steak House, Chili’s and Swensen’s are popular staples in Taipei—American restaurants serving American foods.
Swensen’s has held a relationship with the U.S. Meat Export Federation (USMEF) for the past 13 years. Through joint promotion, Swensen’s not only works to introduce more U.S. beef knowledge to customers, but also successfully proves the quality of the company’s beef dishes. Continuous campaigns promote U.S. beef with USMEF agreeing to pick up half the campaign tab.
Pork is number one in Taiwan with poultry following closely behind. The two commodities account for 90 percent of the country’s livestock production. U.S. beef consumption is valued at $150 million a year. It’s considered a specialty item and is mostly found in the hotel and restaurant industry.
However, the Taiwanese culture has a strong tradition of eating out. Close to 90 percent of the time people will choose a restaurant over home cooking.
There is little cattle production in Taiwan. Domestic production of beef only accounts for 5 percent of the market, which spells nothing but opportunity for Texas ranchers.
"I think there is a real interest in buying the higher grade beef, better quality steaks, particularly Angus beef," says TFB District 5 State Director Dan Shelton. Shelton is an Angus beef producer from the northeast part of the state.
Shuh Sen Co., Ltd. is the top importer of beef in Taiwan. Forty-five percent of all beef in Taiwan is handled by the company. Texas alone accounts for 9 percent of the Shuh Sen business while the rest of the U.S. makes up 47 percent. A host of other countries round out the other 44 percent of the market.
However, the U.S. is trumped by Australia in total beef exports. The Australians corner 40 percent of the market while the U.S. accounts for about a third. Per capita consumption of beef stands at 8.5 pounds.
Per capita consumption of pork is around 88 pounds every year. The domestic market is nearly self-sufficient. Taiwanese pork has a high quality image in the minds of citizens. Pork producers are subsidized by the government.
The U.S. is responsible for close to half of all pork imports, ranking number one, only slightly ahead of Canada. By the end of 2009, export value of U.S. pork to Taiwan was up 26 percent to $67 million and up 35 percent in volume, just under 43,000 million metric tons (mmt).
There are some access issues as Taiwan is a densely-populated mountainous island. It’s home to 23 million people on a stretch of land about the size of the states of Maryland and Delaware combined.
The population of Taiwan is holding steady with some concern that it will soon begin to shrink. The country boasts one of the lowest birth rates in the world, about one child for every woman. The government is even handing out incentives to encourage childbirth.
Japan depends on U.S.
In Japan, the capital city of Tokyo is as modern as any in the world. Skyscrapers tower as far as the eye can see. It’s the largest metropolitan area on the globe. Just about anything available in the U.S. can be found in Tokyo.
The Japanese culture is the most formal in the world. Respect is paid to each guest. When it comes to eating, the Japanese are willing to fork out a little more money for higher quality food. Residents spend 9 to 14 percent of their disposable income on food.
Japan has a population of 127 million that will spend $600 billion on food each year. In comparison, the U.S. is home to 300 million people that will spend about $1 trillion on food each year.
Japan boasts the third highest gross domestic product (GDP) in the world, behind the U.S. and China respectively. However, with such a dense population spread out over a country slightly smaller than California, food production is a challenge.
"I’m amazed how small the areas are that farmers have to work with," says Michael Meador, chairman of the TFB poultry advisory committee. "They use every bit of land that they can possibly use with the population being so high."
Japan farmers and ranchers can only meet 40 percent of the food needs in the country. Rice is the only self-sufficient crop. A wide range of other commodities are grown including feed grains, Chinese yams, sugar beets, vegetables, a variety of beans and livestock, including beef, poultry and pork.
The lack of self-sufficiency is where Texas and the rest of the U.S. come in.
"We feed that country," says TFB District 6 State Director David Stubblefield. "There are a lot of folks here and they depend upon us. It’s a real market for us in the United States."
Stubblefield is a fourth generation cattle, cotton, wheat and sorghum producer from Colorado City.
When it comes to feed grains, the U.S. Grains Council (USGC) says Japan is the top export market for U.S. corn and second largest for sorghum.
On Japan’s mainland of Hondo, average farm size is one to three acres. It’s on Japan’s northern island of Hokkaido where the majority of the country’s agriculture production takes place. The soil there is some of the richest you will ever see. Eighty percent of the soil is volcanic ash.
The growing season is comparable to that of the Panhandle of Texas, late spring to early fall. Winter on the island runs from November to May. Farm sizes are smaller than those found in the Lone Star State. The average size is 40 hectares, or around 100 acres.
Cooperatives are common in Japan and are referred to as a JA (Japan Agriculture Cooperation). They are very similar to co-ops found in Texas, acting as a storage facility and commodity trader. The JAs showcase some of the most modern storage facilities found anywhere, made possible by government subsidies that account for 50 percent of the equipment costs. JAs also handle farm inputs. However, they are actually developed by local municipalities.
"They have created a price for their products that’s equitable in their marketplace so they can survive and live like everybody else," says TFB District 8 State Director Richard Cortese, a grain and livestock producer from Little River-Academy. "In our country, we set our price at the lowest common denominator instead of at a common denominator equal to what our people earn as far as their ability to pay."
Questions answered at a local dairy on Hokkaido solidified the notion of such a price structure.
"Milk prices in the U.S. now probably range from $14 to $16 per hundredweight. He (dairyman) was getting close to $40 per hundredweight if he would sell directly to the processor," says TFB District 12 State Director Russell Boening. "The prices that their farmers receive seem to be good prices. They seem to be taking care of their farmers but they do seem to need our product."
Seafood is the main staple in Japan. A visit to the Tsukiji Market in Tokyo solidifies that fact. Established in 1935, the Tsukiji is the nation’s largest wholesale market. Its earliest beginnings can actually be traced back to the Edo Period in the 17th Century.
Today the market deals with almost all perishable foods and flowers. Some 4,000 metric tons of perishable foods are sold at the market every day.
When it comes to beef, Japan produces around 43 percent of its own market. Australia matches that amount, while the U.S. rounds out the rest of the market.
Compared to the U.S., beef consumption in Japan is low, around 11 pounds per person per year. The U.S. averages around 60 pounds per person per year, according to the United States Department of Agriculture (USDA).
Although there is much competition from countries closer to Japan, the USMEF sees much opportunity.
"Over the last couple of years, you can see on the graphs that the beef coming in from the United States is increasing every year," says TFB District 9 State Director Jay Snook, an East Texas resident invested full-time in a timber and cow-calf operation. "If we can ever get the ban lifted from the U.S. and extend the age up to 30 months, we could have a real big impact on the cattle industry here in Japan."
Snook refers to the time when Japan was the largest importer of U.S. beef. The country stopped the imports after mad cow disease was detected in an American herd in late 2003 and has only resumed limited imports since then. Tokyo agreed in 2006 to resume U.S. imports from cattle under 20 months, except for high-risk parts such as brains and spinal cords.
In dealing with pork, 35 percent of U.S. exports head to Japan. The country does produce over half of its own market with the U.S. coming in second at around 18 percent.
The USMEF is moving forward with campaigns to promote U.S. meats in grocery stores and restaurants. TFB representatives on the trip became part of the campaigns, stopping in the local grocery stores, sporting their Stetsons and visiting with customers as meats from Texas were grilled and sampled in the store. Steaks and pork chops flew from the racks.
The USMEF even took the promotion a step further. Shelton, Snook and Boening became part of a media relations campaign and were interviewed by a public relations firm that represents the USMEF.
Though half a world away, challenges in the agriculture world mirror many found in Texas and the U.S. One of the most notable is the aging population of farmers and ranchers in Japan.
There are 2.2 million farmers in Japan and their average age is similar to that found in Texas, just under 60 years old. Much like the Lone Star State, the government scrambles to provide incentives and assistance to encourage the younger population to seek a profession in agriculture.
The time the TFB delegation spent in Japan proved to be a volatile period for the country’s government. Prime Minister Yukio Hatoyama announced his resignation June 2. The announcement came on the heels of his broken campaign promise to move a U.S. military base off the southern island of Okinawa.
It was an unfortunate announcement that could have an impact on trade relations between Japan and the U.S. During meetings with agriculture attaches from the U.S. Embassy in Tokyo, representatives there expressed the hope the prime minister would not resign because of the positive relationships that have been developed with that administration.
Agriculture Secretary Tom Vilsack was recently in Japan working to build trade relationships.
Great opportunity in Far East
Opportunity abounds for the U.S. and Texas in both Taiwan and Japan. The TFB delegation was pleased by the work of commodity groups such as the USGC and USMEF, and by Embassy leaders.
These Far East neighbors will always be in need of resources from the outside world. With so much competition across the globe, both are coveted markets.
"We’ve got to maintain," says TFB Vice President Dewey Hukill. "We have some competition, especially from countries in grain sorghum, for instance. We are not very competitive with Australia. Freight has some to do with it. Maintaining is going to be a major problem for us. As long as we can keep the quality and everything up, we’ll be all right."
As far as increasing trade, there are political hurdles. Protection of local producers is a key issue in both countries.
However, it’s clear both Taiwan and Japan lack the resources to be self-sufficient. It’s not about taking markets away, but filling a void they can’t meet.
"They may have been a little intimidated by us being here," Dierschke says. "They might have been a little bit concerned that we’re trying to work on their markets, trying to take some of the markets away from them that they had developed. But I think after our meetings we’ve assured them we’re here to expand on what they are doing and not take away their markets."
In the end, the trip sparked a lot of interest among both Taiwanese and Japanese producers who may find themselves on a trip to the Lone Star State in the near future.