Authentic Voices:
Conversations on Food and Agriculture

1. Developing the market for U.S. beef in Japan

2. Products for the Japanese market

3. Japanese requirement for BSE testing

4. Thoughts on the future: beef in Asian markets, the U.S. beef industry

Products for the Japanese market

F: The nice thing about the market is that they take a lot of the offal and variety meats. One thing that's wrong with what the USDA is doing now is that they're worried about the approximately twenty dollars per head cost [for testing]. Well, now the USDA has already taken almost ten dollars a head in revenue away from the producer so half the cost of the test is out the window right now if something doesn't change. In [the restrictions on ] SRMs [specified risk materials], they've said that we could not save the small intestine or the large intestine [from any age cattle] but, at the same time, they say that in a young animal it's impossible to have BSE. So, we've asked and no one will give us an answer as to, if there is no problem in young cattle, why do we have any SRM [restrictions] in young cattle. If you go a step beyond and test them, even though they say scientifically you don't need to test, then let us save the SRMs. The small intestine by itself is worth about seven or eight dollars a head, being sold in Japan. And [here is] more than you probably ever wanted to know—they will pay a premium of about three or four dollars a head if you'll turn the intestine inside out. We are one of the few packers that had developed equipment to do exactly that.

W: Have you invested in other special equipment to process product for this market?

F: On some things like that. You can do it manually but you can do it more efficiently with special equipment. But [they buy] outside skirts, hanging tenders, hearts, tongues, livers, all the good items. A lot of [the stomach] goes to Mexico, but there is a market for every single item in Asia. We were selling a lot of our bones to Asia for soup stock and other uses. At the same time, they buy very few round cuts, but they buy a lot of chuck cuts. What we call boneless chuck ribs were selling in the three dollars a pound area and [now] we have to sell the same product in the dollar a pound area. It equals almost fifty dollars a head that we lose right now [compared with what we earned] with the Japanese market. They also buy tenderloin strips. And they like to buy prime product. That's close to their Kobe beef. There is a market for almost every cut, and it just depends whether there is a better market there than what we can sell in the U.S. In the U.S., we have more demand than we can supply for prime, so not much of our prime would go to Japan, but some still did. But the striploin, the ribeye, and the navel [went to Japan]. [The navel] was an item that was very difficult for all processors when that market was cut off. The navel is cut up into pieces that go in to the rice bowl—I am sure that you are familiar with the rice bowl restaurants. The navel – it's not the stomach, it's the belly, that same item you make bacon out of in pork. In some cases, Japanese taste is to like a higher degree of fat. That's perfect. The U.S. likes leaner and Japan or Asia likes fatter. You go accordingly. And we are better off by doing that.

W: Have you eaten many of the dishes that the Japanese make with your product?

F: Oh yes!

W: How do they fix it? What do they do with, for example, intestine that has been turned inside out?

F: Oh yes, some of it is chewier than what I like, but good. Tongue is very good. There’s a fair amount of tongue sometimes in upper-end restaurants. They slice it thin. In Japan, in some nice restaurants they have what looks like a small Hibachi that they put on your table and you barbecue it. It’s very good. Hanging tenders are sold at some high-end restaurants as well. I’ve tried pretty much all the items.

W: Have their preferences changed over the years, as you have been working with Japan?

F: A little bit, but it might be a little surprising. There’s still a very good market in Japan, even among the young people, for intestines, but there is some decline in some of the items. Some of the items were consumed because of price but, at the same time, there were items that you would think [sold] only because of price and, yet, when there is a shortage of it, the demand is still there, and that market price can go up substantially. It’s part of the diet, part of what they like to have, and they want to buy it at whatever the market price for it is.

W: Are your products packaged differently for the Japanese market?

F: Some are, and some aren’t. Just like with the meat, they will have some requirements. They might like dividers—it just helps the appearance [of the packaging]. Sometimes the boxes are different. But that becomes difficult in the plants to create what you [need]. There a number of items that we do in smaller boxes. [The Japanese] were among the first who just wanted [a box] that was nothing more than 60 pounds, versus some of the boxes that used to be 80 to 90 pounds. In some cases, we put we put bubble packaging in the shipments. They have other requirements – they really put a lot of emphasis on minimizing the purge in bags, [for example]. Temperature control is very important. Of course it is important here in the U.S. as well but when you are shipping so much farther, it becomes a little bit bigger issue.

W: Is it almost all chilled beef?

F: They [also] take a lot of frozen. I don’t know what the percentage is. It may be close to fifty-fifty. Some things like navels may be frozen. The shelf life of product in the U.S. has been improved tremendously, with some of the things that have been put in place to reduce bacteria. Even [removing] the non-harmful bacteria increases the shelf-life of product. We put carcasses through acidic washes and other methods, a lot more hot water and other things, and that really made the difference. So you can keep [the product] refrigerated for thirty to sixty days with no problem at all.

W: How is your product marketed in Japan, under what label?

F: Under the Creekstone label. A good deal of our business has been in food service. There may have been a little bit [sold] in retail under the Creekstone brand. After all this, I think we may have a lot more. We’ve had a number of retailers who said they wanted to be the first to buy Creekstone product no matter what because they feel that there is a trust level in what our company is trying to do in taking care of the consumers. It will open some day, I am not sure exactly when or how.

Next: The Japanese requirement for BSE testing