The Japanese food industry is starting to realize how badly it has been hit by the effects of a ban placed on imports of U.S. beef nearly a year ago following the detection of cases of bovine spongiform encephalopathy, or mad cow disease, in the United States.

Hardest hit were restaurants serving beef dishes such as gyudon, a bowl of rice with seasoned beef, since U.S. supplies accounted for about one-third of domestic beef consumption.

Although the Japanese and U.S. governments are negotiating to resume beef imports, the outcome looks unpromising.

Some restaurants have switched, or are switching, to supplies from Australia and other beef-producing countries, which further dim prospects for U.S. beef to reenter the domestic market.

“About 10 percent of the 20,000 yakiniku restaurants in Japan went under after U.S. beef imports were halted,” Takeshi Yamada, of the All Japan Yakiniku Association said on Dec. 9 during a restaurant industry meeting at a Tokyo hotel.

Korean barbeque restaurants relied heavily on U.S. beef since grain-fed U.S. cows are famed for the tender meat favored in boneless short ribs and tongue dishes.

After the imports were halted, the wholesale price of Australian beef tongue and other beef products more than doubled, which hurt small restaurants.

UFJ Institute Ltd. estimates losses stemming from the U.S. beef ban will reach 273.2 billion yen for the entire meat industry, including 128.8 billion yen for the restaurant industry and 73.6 billion yen for food retailers.

Leading gyudon chain operator Yoshinoya D&C Co. has yet to schedule a reintroduction of its popular gyudon dish due to its large-scale operation.

Yoshinoya had been serving short plate beef from U.S. cows in its gyudon dishes. As a cow produces only 10 kilograms of this cut, and Yoshinoya requires an annual supply of 30,000 tons, this amounts to 3 million cows - an amount that could not be replaced by Japanese and Australian beef.

“We can’t think of resuming gyudon sales without U.S. beef,” Yoshinoya President Shuji Abe said.

The operator lost up to 40 percent of its monthly customers in the previous year and is predicting unconsolidated losses for the first time in 24 years in its business year ending February 2005. To prevent further losses, Yoshinoya may import beef from countries other than the United States so it can bring back gyudon to its menu.

Some restaurants have already turned to beef from countries other than the United States. Gyudon restaurant operators Matsuya Foods Co. and Zensho Inc., which owns the Sukiya chain, are heading for recovery after putting beef back on the menu thanks to supplies from Australia and other countries.

Matsuya Foods has established a system to locally process Chinese beef and plans to maintain the supply channel even after U.S. beef reenters the Japanese market.

Australian beef imports are expected to surge to about 400,000 tons this year from 280,000 tons in 2003.

Tokyo and Washington have reached a basic agreement on the resumption of imports of cattle certified to be younger than 20 months, but with few U.S. farms having data on the ages of their cattle, the Japan Food Service Association said that imports of U.S. beef for gyudon, boneless short rib and tongue could be only 10 to 20 percent of the supply in 2003.

An employee of a supermarket store said that if domestic beef, which undergoes blanket tests, and U.S. beef, which is not checked for BSE, are put on sale side by side, consumers might become confused.

It is hard to tell whether consumers would buy either product, he said.

After the two governments on Oct. 23 reached a basic agreement on the resumption of imports of cattle younger than 20 months, there was hope U.S. beef imports could restart by spring. But imports have been placed on hold since the two sides remained divided over methods to determine the age of cattle.

Japan said it could resume at an early stage imports of cattle whose ages were recorded at farms, but because records are kept of the age of only 10 percent of U.S. cattle, Japan’s suggestion would not lead to a massive bonanza of beef imports.

As a result, the U.S. side asked Japan to accept a method to determine ages by meat quality and bone maturity, which would be easy to carry out, but Japan rejected the idea, claiming the margin of error was too great, and an agreement on a method to determine the age of cattle, which was expected to be reached this year, was shelved.

On Dec. 16, U.S. Ambassador to Japan Howard Baker urged Agriculture, Forestry and Fisheries Minister Yoshinobu Shimamura to resume imports of U.S. beef as soon as possible.