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ACX 快讯To help stabilize feed costs, Japan’s Ministry of Agriculture, Forestry, and Fisheries (MAFF) announced a $415 million subsidy. Compound feed costs have seen significant increases due the the doubling cost of corn. According to the USDA Gain Report, the money will help absorb feed cost surges and will last until March 2009. Nearly 75% of imported corn to Japan is used for miscellaneous livestock feed, and almost all corn is imported from the United States. The subsidy represents more than 16.5% of the total cost of corn used for feed according to USDA.
The corn subsidy is good, but where is the hay subsidy? Forage commodities have experienced the same volatile prices as corn, yet there is no subsidy to help the Japanese dairy farmer buy hay. Unlike corn, the hay imported by Japan is used almost exclusively for dairy cows. If hay can not be subsidized, the dairy farmer should at least be allowed to raise the price of the milk he produces so he can afford to stay in business. Japan already has a butter shortage; no dairies means no milk, cheese, chocolate, cream, desserts, cookies, etc.
With a 16.5% subsidy for roughage products, Japan’s hay importers would recoup more than ¥7,000 per metric ton of of quality hay.
I do not understand why it is so difficult to increase the milk price on behalf of the Japanese dairymen. In my opinion, the milking industry in Japan must be much more proactive on behalf the Japanese dairymen and make drastic price increases in order to protect and preserve milk production in Japan. In a regulated industry like the milking industry in Japan, the problem in my opinion is not really volume of milk but price per unit of milk. Base dairy production in any country must offer producers a price per unit that covers their input costs, while quota can deal with the need for the market to adjust to the supply and demand changes. The Japanese dairies need huge increases in their milk price in order to stay in business. Why industry leaders in Japan fail to take immediate emergence action to increase the milk price paid to the Japanese dairymen is beyond all business reason. Can anyone out there help me understand the lack of reaction to the dairymen’s plight in Japan?
I agree with your comments. The milk price in Japan must increase to make the survial of all Japanese Dairymen. If many dairy farmers close their farms, the supply of milk will decrease, and the price will increase. However, if left alone, this action may be too dramatic and difficult to overcome. It would be better to increase the milk price to adjust the industry slowly.