No butter in Japan due to feed shortages

A sharp increase in the cost of imported cattle feed and a decline in milk
imports, both of which are typically provided in large part by Australia, have
prevented dairy farmers from keeping pace with demand.

A 130% rise in the
global cost of wheat in the past year, caused partly by surging demand from
China and India and a huge injection of speculative funds into wheat futures,
has forced the Government to hit flour millers with three rounds of stiff
mark-ups.

The latest — a 30% increase this month — has given rise to
speculation that Japan, which relies on imports for 90% of its annual wheat
consumption, is no longer on the brink of a food crisis, but has fallen off the
cliff.

According to one government poll, 80% of Japanese are frightened
about what the future holds for their food supply.

Last week, as the
prices of wheat and barley continued their relentless climb, the Japanese
Government discovered it had exhausted its ¥230 billion (€1.4 billion) budget
for the grains with two months remaining.

It was forced to call on an
emergency ¥55 billion (€335 million) reserve to ensure it could continue feeding
the nation.

In the wake of the decision this week by Kazakhstan, the
world’s fifth biggest wheat exporter, to join Russia, Ukraine and Argentina in
stopping exports to satisfy domestic demand, the situation in Japan is expected
to worsen.

Self sufficiency declines
Arguably Japan’s biggest
concern, however, is its weakening ability to sustain its population with
domestic produce. In 2006 the country’s self-sufficiency rate fell to 39%,
according to the Agriculture Ministry.

It was only the second time since
the ministry began keeping records in 1960 that the population derived less than
40% of its daily calorie intake from domestically grown food.

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