Customers that love consuming eggs and machinery manufacturers focused on innovation and export characterise Japan and its poultry sector, as Jake Davies discovered on a recent trip.
Japan is a colourful country of contradictions; in some ways high tech, in others staunchly traditional. The same goes for agriculture in this crowded country. There has always been a need to innovate and make use of every available space in the most efficient way, whether that’s traditional terraced rice fields cut into a hillside or growing salad in multi-storey buildings in city centres.
The egg industry is characterised by a stable market that recognises the value in a premium product, high domestic consumption and by and large self-sufficient production, with little egg traded beyond its borders. The number of laying hens nearly matches the population of 120 million people, providing almost an egg a day for every man, woman and child.
About Nabel and Kohshin
Nabel is one of a handful of companies worldwide that produces egg grading and packing machinery. Formally established in 1964, it began as a contracted manufacturer of electrical products before diversifying into its current product lines. The company has machinery operational in 59 countries worldwide.
Kohshin produces machines that treat manure, and was founded in 1970 by Eiichi Sumiya. Its composting equipment dries and pelletises manure producing an organic fertiliser equivalent to chemical alternatives. It has sales in 21 countries.
Producers gain a premium for certain types of eggs enriched with vitamins or minerals such as selenium, or by tailoring diets so that hens produce speckled shells, or brighter yolks.
Away from the top end of the market, everyday eggs are mostly white, with some 25%-30% brown and about 10% light brown, according to Kensuke Nishikoji, of Nabel, a manufacturer of grading and packing machinery for the egg industry.
Hens are by and large kept in conventional cages, with only a tiny proportion free-range – one example spotted after much searching of supermarket aisles had 4 eggs at 480 yen, about US$ 4. Is that something that might change? It is unlikely, according to Mr Nishikoji. “The amount of land we have to use is quite limited – how could we change from cages?”
It is a sentiment shared by most in the poultry industry, he explains, though consumers could change in the coming years, in particular those who have lived and studied abroad: “They may bring back different ideas about welfare,” he suggests.
One farmer who feels that is a distinct possibility is Yasuo Akagi, of Amuse Co, a poultry farming enterprise located in the far south of Japan’s main island, Honshu. Originally a hatchery business, 8 years ago the family bought a packing centre and moved into egg production. Today the flock numbers around 2.5 million hens, is building a liquid egg facility and investing in aviary systems. Eggs are washed and hygiene is paramount, as a raw egg accompanying a dish in Japan is as common as ketchup with chips in the west.
The investment in barn is part of an international attitude that Mr Akagi has brought to the business through his membership of the International Egg Commission. He has seen the changes in Western markets and expects the same to happen in Japan, eventually.
“In the United States, by 2025 most eggs will be moving cage free. That movement will come to Japan,” he says. “Also, in 2020 we have the Olympics coming, and that is a global movement.
“It’s only 10% of my total bird numbers. The first 5 years will be a test – after that, I will decide whether to invest in enriched or expand barn.
“I want to be careful, as in Europe in 2012 many farms installed enriched cages, now farms are moving to aviary systems.”
“And in Japan, we have high temperatures and high humidity, so we think it will be more difficult to control disease.
“Also, for employees, I think the aviary system will be more tiring work – collecting floor eggs and dead birds.
“Over the next 5 years I will ask my employees how hard it is. If they accept the extra work, I will invest in aviary system. But if employees don’t want it, I will invest in enriched cages.”
Another farmer, Hirano Koji, of Yamato Egg, does not see the market changing fundamentally any time soon. He is midway through an investment close to $ 1m to expand conventional cage production and pullet rearing to grow his family farm, which he hopes his son will one day inherit.
“[Cage free] is not going to happen in Japan,” he explains. “It’s very hot, with high humidity in the summer, and very cold in the winter.” Managing different systems would be too challenging in the climate, he feels.
Even if there was an appetite for change, he adds, it would be difficult to increase the egg price enough to justify investment – it has remained at a stable price for the past 20 years.
For Mr Koji, labour availability is a pressing challenge. As in the west, fewer young people see working on a farm as an attractive prospect. Unlike European countries and America, however, immigration is tightly controlled in Japan, making migrant labour difficult to get hold of.
His 180,000-bird farm currently employs15 staff, 7 of whom are Japanese. The 8 migrants are classed as trainees and are from China. “It’s extremely difficult to find young people,” explains Mr Koji, “It is demanding full time work – 20 years ago it was easier to attract staff.”
Another challenge facing poultry farmers in Japan is manure disposal – the limited space means nitrate disposal is tightly regulated. Composting machines are a speciality of Kohshin, which grew from the need for all farmers to process manure before disposal in the domestic market, but today it focuses on developing sales internationally, according to chief executive Hiroki Sumiya.
“17 years ago we began exporting,” he says. Indeed, today 70% of business happens outside Japan. It reflects in the profile of employees; unusually for typical companies in the country about a third of the workforce is foreign.
It is developing new analysis of its processed manure to aid farmers in marketing it as an organic fertiliser, and expanding in South America, the USA and just beginning to look at European markets.
Placing importance on exports is typical of such businesses, with grading company Nabel also focused on expanding business internationally, while retaining a market share in Japan.
Our thanks to Nabel and Kohshin for their hospitality in organising farm visits for Poultry World