Japan’s ongoing crisis is likely to be felt by Colorado’s ranchers and meatpackers, as well as by car sellers and buyers alike. The scope and duration of the economic impact, however, remain difficult to predict.
Beef and other types of meat were the top products Colorado shipped to Japan in 2010, when exports to the country totaled $318 million. The state exported nearly $90 million in beef to Japan last year, and $35 million in other edible meat products, including pork and offal, or organs. That was up 20 percent from 2008, according to WISERTrade data provided by the World Trade Center Denver.
Because beef is expensive relative to other foods, exports may fall as Japan recovers from the multiple blows of a deadly earthquake and tsunami, followed by a deepening crisis at a damaged nuclear-power plant.
“The majority of U.S. beef comes into Japan through Tokyo and to the south, and that infrastructure has not been damaged,” said Tim Larsen, senior international marketing specialist with the Colorado Department of Agriculture. “But their economy is shaken. Anytime that happens, people draw back a little. They’re more conservative, they don’t go out to restaurants as often, and they spend less money.”
The market prices for beef and another big Colorado export to Japan, wheat, have fallen in recent days in anticipation of reduced demand. Colorado’s agricultural exports to Japan grew by 33 percent from 2007 to 2009.
Japan’s troubles also are beginning to roil the automotive market, and those effects may soon be felt here, said Tim Jackson, president of the Colorado Automobile Dealers Association. Japan’s major automakers manufacture many of their vehicles in the U.S. for the domestic market, but models made in Japan, such as the Prius, may become more scarce over time, and prices may rise, Jackson said.
About 20 percent of car parts used in domestic production come from Japan, Jackson said.
“That will have a growing negative impact on production here. The question is, how long?” he said. “Every day they go without being able to export, there’s more risk of production delays here.”
Colorado’s tourism industry could see a decline in revenue from Japanese visitors. About 60,000 Japanese visit the state annually, according to the U.S. Department of Commerce’s Office of Travel and Tourism Industries.
The office ranks shopping as a top activity for Japanese tourists, who in 2009 spent an average of $4,700 a person during their U.S. vacations.
Denver Post staff writer Jason Blevins contributed to this report.
