At wagyu auctions nationwide, a beef cattle calf is being sold for ¥800,000 (US$7,705) on average in 2016, up from about ¥550,000 (US$5,300) in 2014, according to the Nikkei Asian Review financial newspaper. Low-quality, young or cross-bred calves are also fetching higher-than-normal prices. In recent years, when supplies have dwindled, there has been a sharp price increase of top-of the-range A5 marbling grade wagyu beef, which is currently fetching about ¥2,800 (US$27) per kilogramme in Tokyo markets. However, this year, breeders and producers have said they are worried that scarcity could eventually depress demand. And if wagyu beef prices fall as a result, producers would be operating at a loss, Japan-based producers and breeders told GlobalMeatNews.
Yoshitomo Kinoshita, director of the Japan Meat Grading Association, noted there had been a sharp decrease in number of wagyu cows, reducing calving: “In 2010 there were 684,000 head but, in 2016, there are 588,000 head,” he told GlobalMeatNews.
To combat this shortage, Takashi Matsumoto, a spokesperson for Japan’s ministry of agriculture, forestry and fisheries, said the ministry was working to increase the number of wagyu calves born via cross-breeding wagyu and dairy cattle, while avoiding any adverse impact on the birth of heifers.
“We are providing practical support in the form of wagyu fertilised eggs and gender-specific semen for dairy farm management as well as practical support with monitoring equipment to advance reproduction,” Matsumoto explained.
But Kinoshita said this solution was threatened by a decline in the number of dairy cows in Japan – in 2012, there were 942,600 head, but now, in 2016, there are only 871,000 head, he said.
A September 2016 report published by Japan’s Agriculture & Livestock Industries Corporation pointed out that the recent price hike of calves was not limited to wagyu; it applies to all beef calves.
In the case of Japanese black, the main breed of wagyu that makes up 90% of wagyu cattle raised and fattened in Japan, the report attributed three factors to the price hike of calves: the abandonment of farms due to Japan’s ageing population; the rapidly shrinking breeding base of cattle; and the falling number of industry traders. However, the steep price rise of dressed carcases has been especially fuelled by the increasing desire of the industry to use producers who fatten their cattle, as well as breed them – increasing calf costs, said the report.
The report showed that some regional initiatives and individual creativity by producers have managed to increase the number of breeding cows. For example, in Yamagata prefecture, farmers are using open pasture and cheaper soft grain silage for their cattle, with support from the government and agricultural cooperatives. The money saved as a result of reduced labour and management costs has been used to introduce more breeding cows.