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Japan’s Cheese Imports Expected To Decline As Domestic Output Grows

Washington—Japan’s 2008 imports of natural cheeses are expected to decline from last year’s record levels, due in large part to higher prices but also to rising domestic production, according to USDA’s Foreign Agricultural Service (FAS).

Japan’s national milk production in calendar 2008 is projected to reach 8.1 million metric tons, up 1 percent from 2007. Farmers in Hokkaido, Japan’s major dairy region, started raising production last fall to meet strong demand for cream and butter.

Expanded cheese production capacities, continued butter shortages, improved market conditions for nonfat dry milk and solid demand for cream have greatly improved market prospects for manufacturing use milk. Demand for fluid milk in Japan for processing use this year is projected to increase by 5 percent to 3.56 million metric tons.

A large portion of this increase will be used by new cheese factories in Hokkaido, which began operations last fall, FAS reported. The rest of the increase will be used to produce other dairy commodities such as butter, cream and nonfat dry milk.

Japan’s first-quarter cheese imports were down 9 percent (or 51,132 metric tons on customs clearance basis) from 2007’s first quarter. High international prices pushed average import prices up as much as 40 percent from last year

Due to high prices, Japan’s import demand for cheeses is expected to slacken this year and is projected 7 percent down from last year’s record to 210,000 metric ton. The projected import decline will be most pronounced in the natural cheeses category and will negatively affect traditional European Union (EU) suppliers, FAS said.

Japan’s imports of US cheeses this year are ...more