The beef export industry continues to play a crucial role in the economies of many countries. The Forbes magazine estimates its net worth at about $ 120 billion surpassing the horticulture industry by a huge margin. Despite provision of much-needed food security and nutrients, the industry is a primary earner to the exporting nation providing the country with the much-needed forex and at the same time alleviating the unemployment plaque. For example, statistics shows that in the United States alone in 2010, 487,600 workers were employed in the meat packing and processing industries. Their combined salaries were in excess of over $20 billion. Various countries have in the recent past channeled vast amounts of resources to the industry, with Brazil, India, Australia and the United States of America being key leaders in the industry. Statistics also show that Russia continues to be the largest importer of beef with figures indicating that in 2017, the numbers are expected to exceed the $50 billion mark.

Australia ranks third in the overall beef export market, the national bureau of statics revealed that beef exports in Australia recorded a smashing 1.1 million tonnes of Australian beef exported to the global market up from the 0.9 million tonnes exported in the year 2012. The figures were expected to rise even to higher levels in the near future. In Australia, the production of cattle beefs is mostly done both in the southern and the northern productions segments. The southern part of the productions zone is piecemeal, in that it is segmented in nature while, on the other hand, the northern part of the production channel is predominantly large scale. The total herd size of the Australian beef population stands at approximately 28 million head with the country exporting 60% of the produce, and the remaining consumed domestically. The country earns on average $600 million from beef exports employing more than 40,000 workers in the field. The most preferred cattle breed on the northern parts of Australia is the Bos Indicus specie. Renowned for its tick resistance ability, high heat resistance and their hardiness. On the other hand, the Bos Taurus is preferred on the southern parts of Australia due to the high quality of meat they produce.

Australia exports most of its beef products to japan, with the Australian department of agriculture estimating that the exports to japan had declined from a high of 388000t to 28800t representing 30% drop in the volume of grade goods between the two countries. This came despite the two countries having signed a trade partnership treaty, japan Australia economic Partnership, JAEPA worth $5.5 billion lasting for a span of 20 years. The deal saw the reduction in the tariffs charged on Australian imports by japan decline from 35.4% to a low of 19%, representing 50% decrease in trade tariff.

Other key markets for Australian beef are Korea, Russia and the United States of America. The year ended 2013 saw an increase in the total amounts of beef exported. The revival of the Chinese economy helped open up the Asian market with sales amounting to over 154800 tons of frozen Australian beef representing an upsurge of more than 52% in the volumes shipped to the Asian tiger. Similarly other markets like the Philippines also recorded significant increases in the amounts of meat exported to these nations. Korea remained Australia’s fourth importer of beef after China; the volume of exports to Korea hit the 144000t mark, representing 15% increases in the sales volume to Korea.

Despite having a contributory effect on the Australian economy, Agriculture still lags behind in terms of technological advancement. Specifically, the Australian beef industry is faced with a myriad of challenges ranging from thin markets that keep on shrinking to stiff competition from other beef exporting countries like Brazil and India. Recent statistics argues that the overall beef industry has been on a declining trend with imports giving preference to beef exports from other countries. Similarly, the interplay of market forces has in the offing fueled the escalating in the prices of fodder, freight charges and fuel. From statistics, the 2013-2014 farm incomes from the production declined to $44000 per farm. Representing 30% drop in earnings for the first time in ten years. On the some note, the reduction in the quantity of cattle at hand is forecast to have a negating effect on the value of farm inventories, with a further decline in profits in the industry of $43000 per beef farm in the period 2013-2014. This paper seeks to bring to light some of the challenges facing the Australian beef export industry to japan as its chief importer. The ministry claims that the overall exports to the Asian country has been on its death bed due to the mounting pressure from the United States of America. In the recent past, the advent of the bovine spongiform encephalopathy (BSE) disease saw most nations being reluctant on beef exports with Japan restricting the exports to heifers of not more than 20 months of age. Resulting to significant drops in the volumes of exports to japan and other leading exporters like the USA.

The research seeks to determine the determinant of the recent drop in the volumes of beef exports to japan. The industry being among the country’s source of revenue, It is significantly important to evaluate the courses of the decline in the volume of trade between the two nations. Specifically the paper aims to:

1. To establish the effect of the bovine spongiform encephalopathy (BSE) disease on the volumes of beef traded to japan.
2. To determine the effect of the low-quality breeds of cattle reared in Australia on the levels of exports to Japan.

Analysis of business environment