ABSTRACT
This brief explores an analytical lens to compare how beef export policies are designed under different market assumptions. The competitive advantage of beef exports depends largely on the underlying “design philosophy”, rather than on factors generally considered, such as quality, price competitiveness, and product attributes. These differences in philosophy go far beyond the marketing efforts by individual companies and define the livestock industry as a matter of national strategy. For comparison, this paper examines Brazil, Australia, and Japan. Subsequently, for Japan, which has developed a system optimized for domestic demand, this brief examines the possibilities available for future beef export competition.
Keywords: design philosophy, market access, beef export, market orientation, livestock traceability
INTRODUCTION
Brazil, Australia, and the United States are the world's top three beef-exporting countries. According to the U.S. Department of Agriculture (2026), beef export volumes in 2025 are 4.38 million metric tons for Brazil, 2.21 million metric tons for Australia, and 1.17 million metric tons for the United States. While the United States is a major beef exporter, Japan provides a useful and insightful case because its beef industry has historically been oriented toward domestic demand. Today, Japanese beef products are widely recognized for their high quality, and with the government’s export promotion policies, exports are growing steadily, but it is still at a very early stage (JETRO, 2026). The central policy question is therefore: Who is the intended customer?
In today’s beef export market, factors such as clearly identifying who the intended customers are, determining how to manage individual animals accordingly, ensuring that these methods are internationally reliable, and establishing a risk-mitigation system have an impact that is at least as significant as quality, price competitiveness, and product attributes of the beef itself. The following provides an overview of how major exporting countries have established such systems.
THREE DIFFERENT STRATEGIES TO BEEF EXPORTS
Brazil: Volume-oriented export strategy
Today, Brazil exports about half of its beef to China. The Chinese market – Brazil’s largest customer – has significant characteristics and these distinguish it from those of the EU and Japan. Currently, China does not require the level of individual cattle management in place in the EU and/or Japan. The priority is a stable supply of beef that is competitive in terms of both quality and price. Consequently, temporary export suspensions have occurred on several occasions when this supply has been disrupted.
In Brazil, individual-level cattle management, as implemented in Australia and Japan, is not carried out, at least not on a national scale. Although the total number of cattle in Brazil is said to be approximately 187 million head, managing every single head of cattle in a predominantly pasture-based raising system presents not only technical challenges but also cost considerations. At the very least, since China – Brazil’s largest customer – demands price competitiveness but does not impose strict requirements regarding individual animal management, this suggests that such management is not considered necessary so far.
Of course, Brazil has systems like SISBOF, or the Brazilian System of the Identification of Cattle and Buffaloes, but these do not cover all cattle, and RFID is not mandatory. In actual operations, visual inspection of ear tags is the primary method, and management is conducted on a farm-by-farm or lot-by-lot basis. The key point is not which approach is better or worse, but what priorities were set to meet intended customer needs.
Australia: Export-oriented national/institutional design
Although both are beef-exporting countries, Australia takes a completely different approach from Brazil. Australia has a cattle population of about 27 million head, which is considerably smaller than Brazil’s. However, thanks to the NLIS or National Livestock Identification System – a nationwide infrastructure system – complete tracking of every head of cattle is in place. Behind this lies a strategic understanding that individual identification – rather than quality or price – is the foundation of export competitiveness. On this basis, the entire beef export system is being designed. Furthermore, Australia has identified its target markets as the EU, Japan, and the United States – all of which demand high value-added products and standards.
If Brazil’s strategic objective is to maximize export volume to China, Australia is likely to ensure it does not lose high value-added markets outside China under any circumstances. Even if Brazil were entering the same market, it would take enormous investment and time for Brazil to establish a national-level system for managing the entire number of cattle, which would enable Australia to maintain its competitive advantage.
However, Australia’s strategy also has its weakness. Building such a system requires a very long payback period. Furthermore, even after the system is in place, it is difficult to attribute the resulting benefits to individual companies. Therefore, government-led leadership – rather than that of private companies – is crucial. In fact, in the real world of international negotiations, not just for beef but for agricultural products in general, beef is treated as one element among many in the overall balance of interests, alongside industrial products and energy, making it difficult for private companies to achieve much on their own.
The differences in strategy between Brazil and Australia illustrate that export competitiveness in modern livestock products is not merely a matter of quality, price competitiveness, and product attributes, but is also significantly influenced by the idea that policymakers design national systems based on which markets they identify as their intended customers. Therefore, the question, then, is how Japan fares in this regard.
Japan: Domestic demand-optimization system
In recent years, Japan’s beef exports have grown steadily, but its presence in the international market remains limited in both volume and value. Japanese beef production is essentially self-sufficient for the domestic market. Individual cattle in Japan are identified. Japan uses ear tags, but electronic identification is not required. The purpose is to address BSE and to demonstrate “safety and peace of mind (Anzen-Anshin)” to domestic consumers. Historically, Japan’s beef production system has developed to satisfy domestic consumers, and it has only recently begun to seriously consider exports, since Japan has been a net importer of beef.
Although Japan has only one-tenth the number of cattle as Australia, it has not implemented electronic identification for all cattle because it is neither technically impossible nor cost-effective. It is believed that, given the scale of Japanese livestock farms, the division of the traditional system of breeding, rearing, and fattening, the priority issue facing agriculture as a whole, not just livestock farming, and because the domestic market is the primary target, this measure is not a high priority at this stage.
The real issue lies ahead. Up to a certain point, scale constraints may be justified. However, the crux of the matter seems to be that Japan must design future systems based on determining “who” will consume domestically raised cattle.
Before discussing how to sell Japanese produce, it is necessary to clearly define, systematically, who the intended consumers are. For example, in Thailand, broiler chicken production for the Japanese market is separate from that for the domestic market. In Japan as well, particularly in the fruit industry, the seeds of agricultural production specialized for export appear to be emerging, distinct from production focused on domestic demand.
THE PITFALL OF DOMESTIC-ORIENTED OPTIMIZATION
Now, setting aside beef for a moment, what characteristics arise when a system in general is optimized for domestic demand? What problems arise when this domestically optimized system is used to target overseas demand?
Perhaps the most obvious pitfall is the tendency to view international standards as “excessive,” and interpret it as “this is sufficient in Japan.” In fact, this approach poses no problems in the domestic market in Japan. This is similar to internationally recognized English proficiency tests, which often serve as a minimum requirement for studying abroad.
A variation of this is likely the system of “international certification.” Whether or not certification is obtained, there are almost no issues as long as the focus remains on the domestic market; however, if even the slightest consideration is given to exporting, the number of necessary conditions (though not sufficient conditions) increases.
The next pitfall is confusing “safety” with “explainability.” In this brief, explainability refers to the ability to demonstrate compliance with internationally recognized standards. The numerous traditional foods (regardless of how they are defined) that have been passed down throughout many countries, including Japan, since ancient times have withstood the test of time and survived, so they should pose virtually no safety concerns. However, when shipping these products to markets with different cultures, climates, languages, and customs, “explainability” becomes essential. It is best to think of “international certification” as a guarantee of explainability.
INTERNATIONAL STANDARDS AS A COST OF MARKET ACCESS
In addition, when introducing products or services optimized for the domestic market to overseas markets, a new “cost of explainability” arises. Consumers in any country are naturally skeptical of unfamiliar products at first.
To dispel that skepticism, transparency is essential. Furthermore, transporting products from their country of origin to overseas markets incurs transaction costs. With these factors in mind, producers/exporters must still bring their products to overseas markets. For both sellers and buyers who accept them, the mechanism that dispels all concerns about a product, in other words – international certification – serves as a form of insurance in the broadest sense. When you think about it, ever since ancient times, when trading goods from distant locations, people have either dealt with trustworthy partners or traded goods that met certain standards. Widespread acceptance among stakeholders has been a key factor in the growth of international trade to its current level of activity.
Finally, it is important not to misunderstand this: it is not a difference in management capability or in quality, manufacturing, or delivery capabilities, but rather a cost of explanation and market access that arises because the target market and intended consumers are different.
POLICY IMPLICATIONS FOR JAPAN
At this point, it is simply a matter of “distinguishing between their uses” or “separating their roles.” Products and services tailored specifically to domestic demand should maintain their current structure, while those intended to export should be designed with an eye toward meeting the minimum standards expected by foreign buyers.
Whether to focus on one or the other, or to produce both – for example, through separate product lines – is not only a matter of the fundamental institutional design of agricultural corporations and businesses, but will likely also influence the direction of Japan’s high-quality beef exports as a national strategy.
CONCLUSION
Each country has unique circumstances, and based on its history and experience, it has developed the system that works best for it. This, in fact, is the result of people’s efforts. The problem is that the underlying design philosophy has been overly optimized for specific conditions. Such policy logic can differ significantly even between Brazil and Australia.
Japan’s beef production sector, which has built a system optimized for domestic demand, could adopt a strategic approach to expand its future options by better understanding international market standards.
REFERENCES
Japan External Trade organization（JETRO） (2026, July). Report by Export Category (Beef). [In Japanese]. https://www.jetro.go.jp/ext_images/industry/foods/item/11.pdf
Mitsuishi, S. (2026, February 13). Differences in Design Philosophy 3: Insight from a Comparison of Brazil, Australia, and Japan [In Japanese]. Japan Agricultural Communications. https://www.jacom.or.jp/articles/260213-87459
Mitsuishi, S. (2026, January 30). Differences in Design Philosophy 2: Beef: Australia vs. Japan [In Japanese]. Japan Agricultural Communications. https://www.jacom.or.jp/articles/260130-87208
Mitsuishi, S. (2026, January 23). Differences in Design Philosophy 1: Beef: Brazil vs. Australia [In Japanese]. Japan Agricultural Communications. https://www.jacom.or.jp/articles/260123-87027
United States Department of Agriculture, Foreign Agricultural Service. (2026, April 9). Livestock and Poultry: World Markets and Trade. https://fas.usda.gov/sites/default/files/2026-04/livestock_poultry.pd
Who Is the Intended Customer? Institutional Design and Beef Export Competitiveness
ABSTRACT
This brief explores an analytical lens to compare how beef export policies are designed under different market assumptions. The competitive advantage of beef exports depends largely on the underlying “design philosophy”, rather than on factors generally considered, such as quality, price competitiveness, and product attributes. These differences in philosophy go far beyond the marketing efforts by individual companies and define the livestock industry as a matter of national strategy. For comparison, this paper examines Brazil, Australia, and Japan. Subsequently, for Japan, which has developed a system optimized for domestic demand, this brief examines the possibilities available for future beef export competition.
Keywords: design philosophy, market access, beef export, market orientation, livestock traceability
INTRODUCTION
Brazil, Australia, and the United States are the world's top three beef-exporting countries. According to the U.S. Department of Agriculture (2026), beef export volumes in 2025 are 4.38 million metric tons for Brazil, 2.21 million metric tons for Australia, and 1.17 million metric tons for the United States. While the United States is a major beef exporter, Japan provides a useful and insightful case because its beef industry has historically been oriented toward domestic demand. Today, Japanese beef products are widely recognized for their high quality, and with the government’s export promotion policies, exports are growing steadily, but it is still at a very early stage (JETRO, 2026). The central policy question is therefore: Who is the intended customer?
In today’s beef export market, factors such as clearly identifying who the intended customers are, determining how to manage individual animals accordingly, ensuring that these methods are internationally reliable, and establishing a risk-mitigation system have an impact that is at least as significant as quality, price competitiveness, and product attributes of the beef itself. The following provides an overview of how major exporting countries have established such systems.
THREE DIFFERENT STRATEGIES TO BEEF EXPORTS
Brazil: Volume-oriented export strategy
Today, Brazil exports about half of its beef to China. The Chinese market – Brazil’s largest customer – has significant characteristics and these distinguish it from those of the EU and Japan. Currently, China does not require the level of individual cattle management in place in the EU and/or Japan. The priority is a stable supply of beef that is competitive in terms of both quality and price. Consequently, temporary export suspensions have occurred on several occasions when this supply has been disrupted.
In Brazil, individual-level cattle management, as implemented in Australia and Japan, is not carried out, at least not on a national scale. Although the total number of cattle in Brazil is said to be approximately 187 million head, managing every single head of cattle in a predominantly pasture-based raising system presents not only technical challenges but also cost considerations. At the very least, since China – Brazil’s largest customer – demands price competitiveness but does not impose strict requirements regarding individual animal management, this suggests that such management is not considered necessary so far.
Of course, Brazil has systems like SISBOF, or the Brazilian System of the Identification of Cattle and Buffaloes, but these do not cover all cattle, and RFID is not mandatory. In actual operations, visual inspection of ear tags is the primary method, and management is conducted on a farm-by-farm or lot-by-lot basis. The key point is not which approach is better or worse, but what priorities were set to meet intended customer needs.
Australia: Export-oriented national/institutional design
Although both are beef-exporting countries, Australia takes a completely different approach from Brazil. Australia has a cattle population of about 27 million head, which is considerably smaller than Brazil’s. However, thanks to the NLIS or National Livestock Identification System – a nationwide infrastructure system – complete tracking of every head of cattle is in place. Behind this lies a strategic understanding that individual identification – rather than quality or price – is the foundation of export competitiveness. On this basis, the entire beef export system is being designed. Furthermore, Australia has identified its target markets as the EU, Japan, and the United States – all of which demand high value-added products and standards.
If Brazil’s strategic objective is to maximize export volume to China, Australia is likely to ensure it does not lose high value-added markets outside China under any circumstances. Even if Brazil were entering the same market, it would take enormous investment and time for Brazil to establish a national-level system for managing the entire number of cattle, which would enable Australia to maintain its competitive advantage.
However, Australia’s strategy also has its weakness. Building such a system requires a very long payback period. Furthermore, even after the system is in place, it is difficult to attribute the resulting benefits to individual companies. Therefore, government-led leadership – rather than that of private companies – is crucial. In fact, in the real world of international negotiations, not just for beef but for agricultural products in general, beef is treated as one element among many in the overall balance of interests, alongside industrial products and energy, making it difficult for private companies to achieve much on their own.
The differences in strategy between Brazil and Australia illustrate that export competitiveness in modern livestock products is not merely a matter of quality, price competitiveness, and product attributes, but is also significantly influenced by the idea that policymakers design national systems based on which markets they identify as their intended customers. Therefore, the question, then, is how Japan fares in this regard.
Japan: Domestic demand-optimization system
In recent years, Japan’s beef exports have grown steadily, but its presence in the international market remains limited in both volume and value. Japanese beef production is essentially self-sufficient for the domestic market. Individual cattle in Japan are identified. Japan uses ear tags, but electronic identification is not required. The purpose is to address BSE and to demonstrate “safety and peace of mind (Anzen-Anshin)” to domestic consumers. Historically, Japan’s beef production system has developed to satisfy domestic consumers, and it has only recently begun to seriously consider exports, since Japan has been a net importer of beef.
Although Japan has only one-tenth the number of cattle as Australia, it has not implemented electronic identification for all cattle because it is neither technically impossible nor cost-effective. It is believed that, given the scale of Japanese livestock farms, the division of the traditional system of breeding, rearing, and fattening, the priority issue facing agriculture as a whole, not just livestock farming, and because the domestic market is the primary target, this measure is not a high priority at this stage.
The real issue lies ahead. Up to a certain point, scale constraints may be justified. However, the crux of the matter seems to be that Japan must design future systems based on determining “who” will consume domestically raised cattle.
Before discussing how to sell Japanese produce, it is necessary to clearly define, systematically, who the intended consumers are. For example, in Thailand, broiler chicken production for the Japanese market is separate from that for the domestic market. In Japan as well, particularly in the fruit industry, the seeds of agricultural production specialized for export appear to be emerging, distinct from production focused on domestic demand.
THE PITFALL OF DOMESTIC-ORIENTED OPTIMIZATION
Now, setting aside beef for a moment, what characteristics arise when a system in general is optimized for domestic demand? What problems arise when this domestically optimized system is used to target overseas demand?
Perhaps the most obvious pitfall is the tendency to view international standards as “excessive,” and interpret it as “this is sufficient in Japan.” In fact, this approach poses no problems in the domestic market in Japan. This is similar to internationally recognized English proficiency tests, which often serve as a minimum requirement for studying abroad.
A variation of this is likely the system of “international certification.” Whether or not certification is obtained, there are almost no issues as long as the focus remains on the domestic market; however, if even the slightest consideration is given to exporting, the number of necessary conditions (though not sufficient conditions) increases.
The next pitfall is confusing “safety” with “explainability.” In this brief, explainability refers to the ability to demonstrate compliance with internationally recognized standards. The numerous traditional foods (regardless of how they are defined) that have been passed down throughout many countries, including Japan, since ancient times have withstood the test of time and survived, so they should pose virtually no safety concerns. However, when shipping these products to markets with different cultures, climates, languages, and customs, “explainability” becomes essential. It is best to think of “international certification” as a guarantee of explainability.
INTERNATIONAL STANDARDS AS A COST OF MARKET ACCESS
In addition, when introducing products or services optimized for the domestic market to overseas markets, a new “cost of explainability” arises. Consumers in any country are naturally skeptical of unfamiliar products at first.
To dispel that skepticism, transparency is essential. Furthermore, transporting products from their country of origin to overseas markets incurs transaction costs. With these factors in mind, producers/exporters must still bring their products to overseas markets. For both sellers and buyers who accept them, the mechanism that dispels all concerns about a product, in other words – international certification – serves as a form of insurance in the broadest sense. When you think about it, ever since ancient times, when trading goods from distant locations, people have either dealt with trustworthy partners or traded goods that met certain standards. Widespread acceptance among stakeholders has been a key factor in the growth of international trade to its current level of activity.
Finally, it is important not to misunderstand this: it is not a difference in management capability or in quality, manufacturing, or delivery capabilities, but rather a cost of explanation and market access that arises because the target market and intended consumers are different.
POLICY IMPLICATIONS FOR JAPAN
At this point, it is simply a matter of “distinguishing between their uses” or “separating their roles.” Products and services tailored specifically to domestic demand should maintain their current structure, while those intended to export should be designed with an eye toward meeting the minimum standards expected by foreign buyers.
Whether to focus on one or the other, or to produce both – for example, through separate product lines – is not only a matter of the fundamental institutional design of agricultural corporations and businesses, but will likely also influence the direction of Japan’s high-quality beef exports as a national strategy.
CONCLUSION
Each country has unique circumstances, and based on its history and experience, it has developed the system that works best for it. This, in fact, is the result of people’s efforts. The problem is that the underlying design philosophy has been overly optimized for specific conditions. Such policy logic can differ significantly even between Brazil and Australia.
Japan’s beef production sector, which has built a system optimized for domestic demand, could adopt a strategic approach to expand its future options by better understanding international market standards.
REFERENCES
Japan External Trade organization（JETRO） (2026, July). Report by Export Category (Beef). [In Japanese]. https://www.jetro.go.jp/ext_images/industry/foods/item/11.pdf
Mitsuishi, S. (2026, February 13). Differences in Design Philosophy 3: Insight from a Comparison of Brazil, Australia, and Japan [In Japanese]. Japan Agricultural Communications. https://www.jacom.or.jp/articles/260213-87459
Mitsuishi, S. (2026, January 30). Differences in Design Philosophy 2: Beef: Australia vs. Japan [In Japanese]. Japan Agricultural Communications. https://www.jacom.or.jp/articles/260130-87208
Mitsuishi, S. (2026, January 23). Differences in Design Philosophy 1: Beef: Brazil vs. Australia [In Japanese]. Japan Agricultural Communications. https://www.jacom.or.jp/articles/260123-87027
United States Department of Agriculture, Foreign Agricultural Service. (2026, April 9). Livestock and Poultry: World Markets and Trade. https://fas.usda.gov/sites/default/files/2026-04/livestock_poultry.pd