Austin
5:04 pm
Fri March 18, 2011

Effect of Japan Crisis on Texas Agriculture

Japan is a major importer of U.S. agricultural goods. Corn is Japan’s number one U.S. import while wheat ranks second and soybeans third. The market in Japan for U.S. beef has been steadily growing as well.  Texas is a major producer and exporter to Japan of corn, wheat and beef. So what are the likely impacts of the Japan crisis for U.S. agricultural exports and for Texas agriculture?

While the short term impact on the Japanese economy is unavoidable, long term, the disaster should not have a major negative impact on the U.S. export market or Texas farmers. It might actually have a positive effect says Mark Welch, Assistant Professor and Texas AgriLife Extension Economist in the Department of Agricultural Economics at Texas A&M University.

“As they begin to rebuild their economy and restock shelves and restore life back to normal, we are going to be in a fortunate position in the United Sates to provide many of those raw products and commodities that they are going to need,” he said. “And so I would think coming out of this disaster they are going to be an even stronger customer even than they are now,” he said.

Which means, Texas farmers may benefit from higher prices.

“We have several of those commodities that are relatively tight supplies right now, like corn and soybeans and so the fact that they’re going to need additional shipments is going to be very positive for prices, which will be a benefit to the agricultural community in Texas,” he said.

When it comes to beef, prices were already up, given an increased international demand and Texas herds at their smallest in decades. Texas is also the largest beef exporter of all states. The U.S. Meat Export Federation released a press statement:

 “Much of the U.S. beef and pork that goes to Japan is delivered to ports from Tokyo southward. Early reports are that most of those ports were not heavily damaged and were expected to be open again this week. Based on information available, there is no reason to expect that this tragic disaster will have a significant effect on demand for red meat products in Japan. It is far too early to speculate about the long-term impact of this disaster on the nationwide economy of Japan, but even in recent economic times that were considered sluggish, Japan has remained a very robust market for U.S. beef and pork.”

Though the price increases will likely benefit Texan farmers, for the average customer in Texas shopping for groceries, those price rises are not such good news. Especially considering recent higher prices at grocery stores.

“Price levels will be higher, which increases the price everyone pays,” Welch said.