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This report highlights Japan’s food processing industry, notable trends, and a new market snapshot of western Japan processors. The industry benefited from a slightly higher exchange rate in relation to the dollar in 2021, compared to 2020, allowing the industry to experience marginal growth by value, totaling $216.4 billion.

FAS Tokyo projects Japan’s overall demand for feed grain to remain robust in MY2021/22 and MY2022/23 as livestock production expands. FAS Tokyo anticipates corn imports to decrease in MY2021/22 and MY2022/23 as feed millers increase the ratio of low-cost rice at the expense of corn in compound feed.

The Japanese Diet is poised to allocate a combined total of 3.2 trillion yen ($27.7 billion) to the Ministry of Agriculture, Forestry and Fisheries (MAFF) from the Government of Japan's 2021 supplementary budget and 2022 annual budget. MAFF's budget will see increased funding for export facilitation, smart agriculture development, and implementation of MAFF's Green Food System Strategy.

Cattle stocks are projected to expand in 2022 as slaughter slowed in late 2021. In the dairy sector, cow slaughter is likely to increase in 2022 to lower excess milk production.