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Japan's Aeon to breed its own 'wagyu' cattle

Supermarket chain operator moves to secure supply as breeders dwindle

The shrinking ranks of breeding farms threaten the stable supply of wagyu beef.

TOKYO -- Japanese retailer Aeon will raise its own cattle for in-house-branded wagyu beef as the number of domestic breeders continues to decline while demand for the meat remains solid.

Supermarket arm Daiei recently took over operation of a cattle ranch in southern Japan's Kagoshima Prefecture in what is believed to be the first wagyu-breeding venture by a major Japanese retailer. The ranch now manages a herd of about 40 breeding females. By 2020, it is expected to be raising about 500 head of wagyu cattle a year. Daiei aims in about two and a half years to begin shipping wagyu it has handled all the way from breeding to fattening up.

Daiei, a unit of Chiba Prefecture-based Aeon, has been raising cattle for its own wagyu brand at a directly run ranch in Kagoshima. By adding stock bred in-house, it aims to increase its wagyu herd by 20% to roughly 5,500 in 2020.

The count of wagyu-breeding ranches in Japan has declined by about 40% in the last decade, owing in part to a shortage of new people entering the field. A major retailer with national sales networks, such as Aeon, getting into breeding should help stabilize Japan's livestock industry as well.

Daiei expects to slash costs 30% or more by procuring cattle internally. The in-house wagyu brand now sells loin for steaks at about 1,100 yen ($9.87) per 100 grams. Trimming production costs will likely let Daiei offer the meat at appealing prices.


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