TIME: Almanac 1990/1990 Time Magazine Compact Almanac, The (1991)(Time).iso/time/031389/03138900.067

Text File | 1990-09-22 | 3KB | 58 lines

BUSINESS, Page 47

Roundup Time for Teriyaki Beef

Japanese investors buy prime U.S. ranches and packinghouses


    Move over, Ben Cartwright. Some rich new cattle barons have
come to town. In the past year Japanese investors have developed
an appetite for U.S. beef-producing properties, including ranches,
feedlots and packinghouses. Zenchiku, a major Tokyo-based meat
importer, bought the 80,000-acre Selkirk Ranch near Dillon, Mont.,
last October for $13 million. A company called Mt. Shasta Beef,
formed by Japanese entrepreneur Masa Tanabe and three California
cattlemen, spent $2.2 million in January to lay claim to a
6,000-acre ranch in Northern California's Siskiyou County.

    What spurred the investments was Tokyo's agreement last June
to lift trade restrictions that limited imports of U.S. beef to 14%
of Japan's market, which last year totaled 676,000 tons. Since
Japanese meat companies expect to import much more U.S.-grown beef,
they realize that if they own some of the American cattle
operations, they will have a larger stake in the profits.

    As the trade restraints begin to fall this month, beef sales
in Japan are likely to boom. Cuts like filet mignon, which sells
for up to $43 per lb. in Tokyo, should become much more affordable.
Thanks in part to spacious grazing land and plentiful feed,
American-grown beef is much less expensive to produce than the
Japanese variety. "In three to five years, we expect to be selling
three times our current monthly volume of 1,200 head of cattle,"
says Kazuhiro Ogasawara, vice president of Mt. Shasta Beef.

    Some ranchers are uneasy about their new neighbors. Says one
cattleman: "They seem to be interested in buying the best spreads
and the bigger processors." But ranchers generally welcome the
Japanese beef boom because the export sales will help revive a
depressed industry. Per capita beef consumption in the U.S. has
fallen from 94.2 lbs. in 1976 to 72.7 lbs. last year. The Japanese
investment should also be a boon for Americans who sell supplies
and expertise to the new beef barons. Says John Morse, president
of Selkirk Ranch: "The Japanese are willing to pay a premium for
people who will raise beef the way they want to produce it."

    Japanese investors are buying cattle operations in Australia
as well. While Japanese consumers generally consider American
grain-fed beef to be the tastiest import, production is less costly
Down Under because Australian cattle are fed more grass. Japanese
trading houses have poured $132 million into Australian beef
operations, more than twice their U.S. investment so far. That
trend has prompted mixed feelings. Last month Australian beef
producers called for government restrictions on further Japanese
investment, but labor unions, whose members have benefited from
increased employment, rose to defend it.

    In general, the Japanese cattle barons have tried to avoid
stirring hard feelings about their new investments. In the U.S.
they have formed joint ventures that include American investors.
And in Australia companies like Mitsubishi have pledged millions
of dollars to upgrade meat-processing plants, which will provide
more jobs. The new cowboys want to be seen as pardners, not
rustlers.