Required Report - public distribution

**Date:** 10/18/2006

**GAIN Report Number:** JA6054

JA6054

**Japan**

**Dairy and Products**

**Annual Report**

**2006**

**Approved by:**

![](media/image1.wmf)Paul Spencer

U. S. Embassy

**Prepared by:**

Kakuyu Obara

**Report Highlights: Japan's overall fluid milk supply and demand in CY
2007 is projected to remain static and surplus stocks of butter and
non-fat dry milk (NFDM) will continue. Fluid milk sales will continue to
be hobbled by competition from non-dairy soft drinks. Compared to
previous years, it will be even harder for the Government of Japan to
manage its JFY 2007 WTO minimum market access commitments for dairy
products. Japan's cheese imports are projected flat at 200,000 MT in
2007. Imports of U.S. cheese in 2006 may exceed 4,000 MT and are
expected to rise in CY 2007.**

Includes PSD Changes: Yes

Includes Trade Matrix: No

Unscheduled Report

Tokyo \[JA1\]

\[JA\]

Table of Contents

[2007 Outlook for Fluid Milk, NFDM, Butter and Cheese
3](#outlook-for-fluid-milk-nfdm-butter-and-cheese)

[Overall Fluid Milk Supply and Demand to Stay Static
3](#overall-fluid-milk-supply-and-demand-to-stay-static)

[High Stocks for Butter and NFDM to Remain
3](#high-stocks-for-butter-and-nfdm-to-remain)

[Oversupply of Fluid Milk Likely Give Government Hard Times in Managing
JFY 2007 WTO Minimum Access Commitments
3](#oversupply-of-fluid-milk-likely-give-government-hard-times-in-managing-jfy-2007-wto-minimum-access-commitments)

[Cheese Demand and Supply to Remain Unchanged in 2007
4](#cheese-demand-and-supply-to-remain-unchanged-in-2007)

[2006 Situation Summary and Update for Fluid Milk, NFDM, Butter
4](#situation-summary-and-update-for-fluid-milk-nfdm-butter)

[Weak Demand for Milk and Dairy Products Persists
4](#weak-demand-for-milk-and-dairy-products-persists)

[Butter Consumption Stays Relatively Solid, NFDM Demand Remains
Depressed
4](#butter-consumption-stays-relatively-solid-nfdm-demand-remains-depressed)

[JFY 2006 WTO Minimum Access Likely to Contain Multiple Products
5](#jfy-2006-wto-minimum-access-likely-to-contain-multiple-products)

[Table 1. Japanese Utilization of Fluid Milk for Drinking Use Category
(Jan. -- June)
5](#table-1.-japanese-utilization-of-fluid-milk-for-drinking-use-category-jan.-june)

[Table 2. Japanese Household Consumption of Dairy Products (Jan. --
Aug.)
6](#table-2.-japanese-household-consumption-of-dairy-products-jan.-aug.)

[Table 3. Japanese Production of Processed Milk Products (Jan. -- June)
6](#table-3.-japanese-production-of-processed-milk-products-jan.-june)

[Table 4. Japanese Imports of Non Fat Dry Milk (Jan. -- June)
7](#table-4.-japanese-imports-of-non-fat-dry-milk-jan.-june)

[Table 5. Japanese Wholesale Price of Butter and NFDM for Bulk Users
(Jan. -- July)
7](#table-5.-japanese-wholesale-price-of-butter-and-nfdm-for-bulk-users-jan.-july)

[Table 6-a. The Current Access Imports of Designated Dairy Commodities
by ALIC (on import contract Basis)
8](#table-6-a.-the-current-access-imports-of-designated-dairy-commodities-by-alic-on-import-contract-basis)

[Table 6-b. ALIC Tender and Bidding Results of the Current Access Butter
and NFDM
8](#table-6-b.-alic-tender-and-bidding-results-of-the-current-access-butter-and-nfdm)

[2006 Situation Summary and Update for Cheese
8](#situation-summary-and-update-for-cheese)

[Weak Yen and High Prices to Lower Cheese Imports Hurting EU Suppliers
8](#weak-yen-and-high-prices-to-lower-cheese-imports-hurting-eu-suppliers)

[Table 7-a. Japanese Cheese Imports (Jan. -- Aug.)
9](#table-7-a.-japanese-cheese-imports-jan.-aug.)

[Table 7-b. Japanese Average Import Price of Cheese (Jan. -- Aug.)
10](#table-7-b.-japanese-average-import-price-of-cheese-jan.-aug.)

[Table 7-c. Japanese Cheese Imports by Product Category (Jan. -- Aug.)
10](#table-7-c.-japanese-cheese-imports-by-product-category-jan.-aug.)

[Fluid Milk and PS&D Table 11](#fluid-milk-and-psd-table)

[Non-Fat Dry Milk PS&D Table 12](#non-fat-dry-milk-psd-table)

[Butter PS&D Table 13](#butter-psd-table)

[Cheese PS&D Table 14](#cheese-psd-table)

Note: Import figures discussed in the text are all customs clearance
based. Discussions pertaining to market access (WTO or Uruguay Round
Agreement minimum market access commitments) are based on the Japanese
fiscal year (JFY), which starts in April and ends in March.

# 2007 Outlook for Fluid Milk, NFDM, Butter and Cheese

## Overall Fluid Milk Supply and Demand to Stay Static 

As in recent years, Japan's fluid milk supply and demand is forecast to
remain static in 2007.

In response to voluntary production targets set by the Japan's National
Dairy Council, dairy farmers began cutting fluid milk production in the
second half of 2006 by 2 -- 3 % a month. Removal of unproductive cows
has also occurred at a higher than usual rate. It is anticipated that
dairy farmers will continue to pull back on production through March
2007 (the last month of the 2006 Japanese fiscal year).

In our forecast, we use the following assumptions: 1) the number of
dairy cows at the beginning of 2007 will stay constant at around 900,000
head, 2) overall consumption of fluid milk and ingredient demand for
NFDM will continue to be flat, 3) there will be no effective government
intervention that results in a cutback of fluid milk production, and, 4)
there will be no decision by the government to substantially lower dairy
subsidies for fluid milk for processing.

## High Stocks for Butter and NFDM to Remain

Based on the above assumptions, Japan's fluid milk production in 2007 is
projected at 8.15 million MT. This is a slight decline from 2006.

In 2007, the prospects for a recovery in fluid milk consumption are poor
due to increased competition with soft drinks and non-dairy beverages
(including mineral water). Thus, lower utilization of fluid milk for
drinking is projected for 2007, down by 1% to 4.63 million MT, which
will cause the use of fluid milk for processing to rise marginally from
a year ago to 3.44 million MT. Thus, stable domestic butter and NFDM
production is projected in 2007. Butter production will rise slightly to
85,000 MT and NFDM will decline marginally to 185,000 MT.

Demand for butter is projected unchanged from last year at 87,000 MT.
Demand for NFDM is projected down slightly to 190,000 MT. Ending stocks
for both commodities in 2007 will remain high. Year-end butter stocks
are forecast to rise by 3,000 MT to 32,000 MT and NFDM stocks are
unchanged at 79,000 MT.

## Oversupply of Fluid Milk Likely Give Government Hard Times in Managing JFY 2007 WTO Minimum Access Commitments 

As a result of the Uruguay Round Agreement, Japan agreed to provide
annual market access totaling 137,200 MT (milk equivalent). For the
third year in a row, the Government will likely purchase a mix of
products to fulfill Japan's minimum access commitments for JFY 2007.
Before imports are made for this fiscal year, the Government needs to
clear carryover commodities imported under the previous year's
commitment (JFY 2006). Because of this, the JFY 2007 access list will
probably not be announced until the latter part of JFY 2006. NFDM, which
is in surplus, will likely be excluded from the list. Dairy spread,
edible whey in excess of the market access commitment, and possibly
butter will be the Government's likely choices for JFY 2007.

## Cheese Demand and Supply to Remain Unchanged in 2007

Post projects steady domestic natural cheese production of 37,000 MT and
total imports of 200,000 MT. By category, similar to 2006, imports of
tariff rate quota (TRQ) natural cheeses are expected to do well in 2007.
The cheese is used primarily for processing and in imported at a zero
within quota duty rate. For natural cheeses for direct consumption
(outside of the TRQ), imports from major EU suppliers will be
substituted to some degree by other competitive suppliers such as
Argentina and the United States. The main reason for this is the
reportedly tight supply of fluid milk for cheese manufacturing and high
prices in the EU.

In JFY 2006, in attempt to create a use of surplus fluid milk, Japan has
increased subsidies for fluid milk used for cheese and cream production.
Post assumes this policy will continue through JFY 2007. In part because
of this policy, the Meiji Dairy Corporation's is building a new cheese
factory that should become fully operational in March 2008 with the
capacity to process 200,000 MT of fluid milk per year. Other major
cheese manufactures are following suit. All together, Japan's domestic
production of natural cheeses is expected to grow significantly in
coming years along with the nation's total capacity to process more
fluid milk. This may eventually change overall supply and demand outlook
of fluid milk in Japan. At the same time, it may help to restore the
balance in nation's overall fluid milk supply and demand provided
Japan's relatively small per capita cheese consumption (which is
currently less than 2 kg per year) increases over time.

# 2006 Situation Summary and Update for Fluid Milk, NFDM, Butter

## Weak Demand for Milk and Dairy Products Persists 

Due to an oversupply of fluid milk through the first half of 2006, diary
farmers finally began curtailing output at a rate of 2 -- 3% per month.
This trend is expected to last at least through the first quarter of
next year. On annual basis, Japan's national fluid milk production is
forecast to decline to an estimated 8.17 million MT, down 2% from a year
before. This is consistent with a slight decline in diary cattle to 0.9
million head. Post noted a move by dairy farmers to cull unproductive
cows during 2006.

Dwindling consumption of regular and processed fluid milk in 2006,
compounded by particularly stagnant ingredient demand for NFDM, is
making it difficult for the Government to create an overall supply and
demand balance for fluid milk (See Table 1, 2 and 3). Reflecting weak
consumption of fluid milk, post projects a decline compared to last
year's utilization of fluid milk to 4.665 million MT, down 2%. Milk used
for processing is expected to remain stable at about 3.4 million MT.

## Butter Consumption Stays Relatively Solid, NFDM Demand Remains Depressed

##  

Domestic production of butter and NFDM will remain at about the same
level as last year on annual basis: Butter at 84,000 MT and NFDM at
187,000 MT in 2006.

Meanwhile, Japan's butter consumption in 2006 is forecast up by 1% to
87,000 MT, supported by relatively solid demand for household and
bakery, desert and confectionary use (See Table 3). However, demand will
not be adequate to address high monthly ending stocks, indicating
surpluses.

In the ingredient market, demand for NFDM is expected to remain fairy
depressed through 2006, projected down by 3% to 220,000 MT (edible use:
down by 3% to 192,000 MT and feed use: down by 7% to 28,000 MT). Note
that Post's above projection includes about 30,000 MT of the surplus
domestic NFDM voluntarily set for priority use at discount by dairy
manufacturers and producers. This collaborative effort has been on-going
for last couple of years as part of an industry effort address high NFDM
stocks. In effect, it has displaced imported products such as prepared
milk powder, NFDM for school lunch and feeds, etc. (See table 4).

High year ending stocks for butter and NFDM are likely. Butter stocks
are projected at 29,000 MT and NFDM stocks are projected at 79,000 MT.

## 

## JFY 2006 WTO Minimum Access Likely to Contain Multiple Products 

The Agriculture & Livestock Industry Cooperation (AILC), the state owned
enterprise administering sales and release of WTO minimum access
commitment commodities, has yet to announce its purchasing list for JFY
2006. However, since this April (the first month of JFY 2006), the
situation was as such that ALIC has been spending most of their efforts
clearing carryover commodities purchased under JFY 2005 commitments (See
Table 6-a).

As shown in the table 6-b, clearing 4,000 MT of the carryover NFDM
purchased under JFY 2005 CA commitment has been particularly troublesome
for ALIC. Of the above total, only 2,052 MT has received a successful
bids (as of Oct. 17, 06), which are mostly of products from New Zealand,
Australia and EU. The balance, 1,067 MT, is yet to be tendered by ALIC.
Industry press reports show there is not much buyer interest at present
due to low demand for NFDM. Thus, like last year, Japanese imports of
NFDM (combined total of school lunch, feeds and other edible purposes)
in 2006 are projected to be 35,000 MT (including carryover current
access NFDM from JFY2005) and it is unlikely ALIC would include NFDM for
their JFY 2006 CA purchasing list.

On the other hand, firm demand for butter through the summer has helped
to clear minimum access butter stocks from JFY2005.

Analogous to butter, dairy spread, which was recently added to the CA
purchasing list in JFY 2005 is reportedly selling well, supported by
demand from desert and confectionary users.

Furthermore, Japan also makes available 4,500 MT of edible whey under
the SBS (Simultaneous Buy and Sell) system each fiscal year of its WTO
minimum access commitment. For the current fiscal year, a U.S. whey
protein concentrate product (WPC) supplier was successful under the SBS
tender held on August 30th. This access category had long been occupied
by EU brands. Out of the total 1,205 MT of WPC sold, U.S.-origin
products garnered a 42% (or 510 MT) share.

As it stands now, Japan's product list for JFY 2006 dairy minimum access
will likely contain edible whey, dairy spread, and possibly butter.

### Table 1. Japanese Utilization of Fluid Milk for Drinking Use Category (Jan. -- June)

  -------------------- ---------- ---------- ---------- ---------- ----------
  Period: January -                                                
  June, 2004 -- 2006                                               

  Unit: 1,000 Kilo                                                 
  Liters                                                           

                       2004       2005       \% Chg.    2006       \- 06/05 -

                       Jan/Jun    Jan/Jun    Jan/Jun    Jan/Jun    \% Chg.

  Regular Milk         1,975      1,895      -4%        1,829      -3%

  Processed Milk       236        224        -5%        214        -4%

  Milk Beverages       567        570        1%         576        1%

  Fermented Milk       393        410        4%         418        2%

  Lactic Acid Bacteria 87         86         -1%        82         -5%
  Drinks                                                           

  Note: Processed                                                  
  Milk: low fat, high                                              
  fat, vitamin and                                                 
  mineral fortified,                                               
  calcium enriched                                                 

  Milk Beverages:                                                  
  flavored milk                                                    
  (coffee and fruits                                               
  flavored)                                                        

  Fermented Milk:                                                  
  Yogurt etc.                                                      

  Source: Agriculture                                              
  & Livestock Industry                                             
  Corporation (ALIC),                                              
  Ministry of                                                      
  Agriculture Forestry                                             
  and Fisheries (MAFF)                                             
  -------------------- ---------- ---------- ---------- ---------- ----------

### Table 2. Japanese Household Consumption of Dairy Products (Jan. -- Aug.)

+--------------------+-------+-------+-------+-------+-------+-------+
| Period: January -  |       |       |       |       |       |       |
| August             |       |       |       |       |       |       |
| (Preliminary)      |       |       |       |       |       |       |
+--------------------+-------+-------+-------+-------+-------+-------+
|                    | Qua   |       |       | E     |       |       |
|                    | ntity |       |       | xpend |       |       |
|                    |       |       |       | iture |       |       |
+--------------------+-------+-------+-------+-------+-------+-------+
|                    |       | 2006  | 06/05 |       | 2006  | 06/05 |
|                    |       |       |       |       |       |       |
|                    |       |       | \%    |       |       | \%    |
|                    |       |       | Chg.  |       |       | Chg.  |
+--------------------+-------+-------+-------+-------+-------+-------+
|                    | Unit  | Ja    | Jan   | Unit  | Ja    |  Ja   |
|                    |       | n/Aug | /Aug  |       | n/Aug | n/Aug |
+--------------------+-------+-------+-------+-------+-------+-------+
| Milk               | Liter | 62.82 | -2.5% | Yen   | 1     | -3.4% |
|                    |       |       |       |       | 2,011 |       |
+--------------------+-------+-------+-------+-------+-------+-------+
| Cheese             | Gram  | 1,484 | 1.0%  | Yen   | 2,020 | 3.3%  |
+--------------------+-------+-------+-------+-------+-------+-------+
| Butter             | Gram  | 317   | 4.3%  | Yen   | 434   | 4.3%  |
+--------------------+-------+-------+-------+-------+-------+-------+
| Margarine          | Gram  | 914   | -6.5% | Yen   | 501   | -4.4% |
+--------------------+-------+-------+-------+-------+-------+-------+
| Yogurt             | \-    | \-    | \-    | Yen   | 5,400 | -1.9% |
+--------------------+-------+-------+-------+-------+-------+-------+
| Lactic Acid        | \-    | \-    | \-    | Yen   | 1,986 | -9.1% |
| Bacteria Drink     |       |       |       |       |       |       |
+--------------------+-------+-------+-------+-------+-------+-------+
| Coffee beverages   | \-    | \-    | \-    | Yen   | 2,273 | 6.4%  |
+--------------------+-------+-------+-------+-------+-------+-------+
| Ice Cream          | \-    | \-    | \-    | Yen   | 4,948 | -4.8% |
+--------------------+-------+-------+-------+-------+-------+-------+
| Source: Ministry   |       |       |       |       |       |       |
| of Internal        |       |       |       |       |       |       |
| Affairs and        |       |       |       |       |       |       |
| Communications     |       |       |       |       |       |       |
| (Daily Dairy News, |       |       |       |       |       |       |
| Oct. 12th Issue)   |       |       |       |       |       |       |
+--------------------+-------+-------+-------+-------+-------+-------+

### Table 3. Japanese Production of Processed Milk Products (Jan. -- June)

  --------------------------- --------- --------- --------- --------- ---------
  Period: January - June,                                             
  2004 -- 2006                                                        

  Unit: Metric Ton                                                    

                              2004      2005      \% Chg.   2006      \- 06/05
                                                                      -

                              Jan/Jun   Jan/Jun   Jan/Jun   Jan/Jun   \% Chg.

  Butter                      45,460    45,923    1%        47,440    3%

  Cream                       39,979    39,302    -2%       41,401    5%

  Whole Milk Powder           8,308     8,295     0%        7,923     -4%

  Prepared Milk Powder        17,168    16,981    -1%       16,014    -6%

  Skim Milk Powder (NFDM)     99,396    97,628    -2%       101,349   4%

  Ice Cream (Unit: kilo       51,547    53,006    3%        59,884    13%
  liter)                                                              

  Source: ALIC Monthly                                                
  --------------------------- --------- --------- --------- --------- ---------

### Table 4. Japanese Imports of Non Fat Dry Milk (Jan. -- June)

  ----------------------------------- --------- --------- --------- --------- --------
  Period: January - June, 2004 --                                             
  2006                                                                        

  Unit: Metric Ton                                                            

                                      2004      2005      \% Chg.   2006      \- 06/05
                                                                              -

                                      Jan/Jun   Jan/Jun   Jan/Jun   Jan/Jun   \% Chg.

  For School Lunch Program            1,445     1,203     -17%      1,147     -5%

  For Feeds                           16,517    13,896    -16%      12,832    -8%

  For Other Use (Current Access and   837       328       -61%      2,142     553%
  other)                                                                      

  Total NFDM Imports                  18,799    15,427    -18%      16,121    4%

  Source: ALIC Monthly                                                        
  ----------------------------------- --------- --------- --------- --------- --------

### Table 5. Japanese Wholesale Price of Butter and NFDM for Bulk Users (Jan. -- July)

  ----------- ------------ ------------ ------------ ------------ ------------
  Butter                                                          
  (Yen/Kg.)                                                       

              2004         2005         \% Chg.      2006         \% Chg.

  Jan         962          951          -1%          947          0%

  Feb         962          951          -1%          947          0%

  Mar         962          951          -1%          947          0%

  Apr         958          949          -1%          947          0%

  May         957          949          -1%          947          0%

  Jun         953          948          -1%          948          0%

  July        950          948          0%           950          0%

  Aug         951          948          0%                        

  Sept        950          948          0%                        

  Oct         949          947          0%                        

  Nov         951          948          0%                        

  Dec         951          947          0%                        

                                                                  

  NFDM                                                            
  (Yen/25                                                         
  Kg.)                                                            

              2004         2005         \% Chg.      2006         \% Chg.

  Jan         13,480       13,272       -2%          13,076       -1%

  Feb         13,480       13,254       -2%          13,071       -1%

  Mar         13,480       13,258       -2%          13,062       -1%

  Apr         13,444       13,254       -1%          13,062       -1%

  May         13,434       13,237       -1%          13,047       -1%

  Jun         13,371       13,233       -1%          13,005       -2%

  July        13,370       13,223       -1%          13,020       -2%

  Aug         13,354       13,197       -1%                       

  Sept        13,353       13,189       -1%                       

  Oct         13,289       13,173       -1%                       

  Nov         13,286       13,078       -2%                       

  Dec         13,278       13,090       -1%                       

  Source:                                                         
  ALIC                                                            
  Monthly                                                         
  ----------- ------------ ------------ ------------ ------------ ------------

### Table 6-a. The Current Access Imports of Designated Dairy Commodities by ALIC (on import contract Basis)

+-------+-------+-------+-------+-----------+--------------------------+
| Unit: |       |       |       |           |                          |
| M     |       |       |       |           |                          |
| etric |       |       |       |           |                          |
| Ton   |       |       |       |           |                          |
+-------+-------+-------+-------+-----------+--------------------------+
| JFY   | NFDM  | Whey  | B     | Dairy     | Carryover to Next JFY    |
|       |       |       | utter | Spread    |                          |
|       |       |       |       |           |                          |
|       |       |       |       | (DS)      |                          |
+-------+-------+-------+-------+-----------+--------------------------+
| 1998  | 1     | 3,900 |       |           |                          |
|       | 7,100 |       |       |           |                          |
+-------+-------+-------+-------+-----------+--------------------------+
| 1999  | 1     | 4,200 |       |           |                          |
|       | 6,800 |       |       |           |                          |
+-------+-------+-------+-------+-----------+--------------------------+
| 2000  | 1     | 4,500 |       |           |                          |
|       | 6,600 |       |       |           |                          |
+-------+-------+-------+-------+-----------+--------------------------+
| 2001  | 1     | 3,828 | 3,640 |           | Butter 3,640 MT          |
|       | 0,500 |       |       |           |                          |
+-------+-------+-------+-------+-----------+--------------------------+
| 2002  |       | 4,488 | 8,810 |           | Butter 5,810 MT          |
+-------+-------+-------+-------+-----------+--------------------------+
| 2003  |       | 3,633 | 9,328 |           | Butter 3,900 MT          |
+-------+-------+-------+-------+-----------+--------------------------+
| 2004  |       | 4,500 | 8,625 |           | Butter 3,820 MT          |
+-------+-------+-------+-------+-----------+--------------------------+
| 2005  | 4,000 | 7,123 | 3,551 | 1,519     | Butter 2,771 MT, NFDM    |
|       |       |       |       |           | 4,000 MT,                |
|       |       |       |       |           |                          |
|       |       |       |       |           | DS 1,519 MT and          |
|       |       |       |       |           |                          |
|       |       |       |       |           | Whey 2,622 MT)           |
+-------+-------+-------+-------+-----------+--------------------------+
| Note  |       |       |       |           |                          |
| 1:    |       |       |       |           |                          |
| Im    |       |       |       |           |                          |
| ports |       |       |       |           |                          |
| are   |       |       |       |           |                          |
| for   |       |       |       |           |                          |
| Jap   |       |       |       |           |                          |
| anese |       |       |       |           |                          |
| f     |       |       |       |           |                          |
| iscal |       |       |       |           |                          |
| year, |       |       |       |           |                          |
| not   |       |       |       |           |                          |
| cal   |       |       |       |           |                          |
| endar |       |       |       |           |                          |
| year. |       |       |       |           |                          |
+-------+-------+-------+-------+-----------+--------------------------+
| Note  |       |       |       |           |                          |
| 2:    |       |       |       |           |                          |
| Jap   |       |       |       |           |                          |
| an\'s |       |       |       |           |                          |
| cu    |       |       |       |           |                          |
| rrent |       |       |       |           |                          |
| a     |       |       |       |           |                          |
| ccess |       |       |       |           |                          |
| t     |       |       |       |           |                          |
| otals |       |       |       |           |                          |
| 13    |       |       |       |           |                          |
| 7,200 |       |       |       |           |                          |
| MT on |       |       |       |           |                          |
| milk  |       |       |       |           |                          |
| e     |       |       |       |           |                          |
| quiva |       |       |       |           |                          |
| lent. |       |       |       |           |                          |
+-------+-------+-------+-------+-----------+--------------------------+
| So    |       |       |       |           |                          |
| urce: |       |       |       |           |                          |
| Daily |       |       |       |           |                          |
| Dairy |       |       |       |           |                          |
| News, |       |       |       |           |                          |
| March |       |       |       |           |                          |
| 22nd  |       |       |       |           |                          |
| Issue |       |       |       |           |                          |
+-------+-------+-------+-------+-----------+--------------------------+

### Table 6-b. ALIC Tender and Bidding Results of the Current Access Butter and NFDM

  -------------------- ------------- ------------- ------------- -------------
  [(For Carryover                                                
  Products from JFY                                              
  2005)]{.underline}                                             

  [CY                  NFDM                        Butter        
  2006]{.underline}                                              

  Carryover Volume     4,000 MT                    2,771 MT      

                       Tender Volume Successful    Tender Volume Successful
                                     Bid                         Bid

  May 16               498           48            189           189

  May 23               450           0             0             0

  May 30               450           366           0             0

  June 6               637           577           42            42

  July 12              807           400           16            16

  Aug. 9               1,091         661           223           223

  Sept. 13             729           0             597           597

  Total sold                         2,052                       1,067

  Yet to be sold       1,948 MT                    1,704 MT      

  Source: Daily Dairy                                            
  News, September                                                
  15^th^ Issue                                                   
  -------------------- ------------- ------------- ------------- -------------

# 2006 Situation Summary and Update for Cheese

## Weak Yen and High Prices to Lower Cheese Imports Hurting EU Suppliers 

Weak prospect for Japanese yen relative to other major currencies in
2006 is expected to reduce the import demand for cheese. Assuming Yen
against other major currencies stays weak for the rest of the year, post
projects Japanese total cheese imports in 2006 fall by 6% to 200,000 MT.
Prime factors attributing to the above projected decline are 1) reduced
imports of natural cheeses for direct consumption from major EU
suppliers such as Denmark and Germany (adversely affected by high
prices, compounded by weak yen against Euro) and 2) significantly
reduced fresh cheese imports, particularly from Australia of medium fat
cream cheese. Declines in the above two categories will likely more than
offset increased imports in other categories such as natural cheeses
under "Pooled Quota (Zero Tariff), and grated/powdered (both natural and
processed) and the processed cheese in 2006.

The prevailing situation is expected to give relatively minor suppliers
a competitive edge over traditional EU countries this year. Argentina, a
new comer to the market but a low price supplier, and the United States
are expected to gain share. Post projects Japan's imports of U.S. cheese
in 2006 will exceed a 4,000 MT mark this year.

Below is a market summary for the first eight months this year. For Jan.
-- Aug., Japan's total cheese imports fell 5% to 132,138 MT compared to
the same period last year. The results were rather mixed by different
product categories (see Table 7-a, 7-b and 7-c). Particularly
attributing to overall decline are reduced imports of fresh cheese (HS
040610: down 6%) and of natural cheese for direct consumption (HS
040690.090: down 13%). Fresh cheese result is largely owing to reduced
imports of medium-fat cream cheese from Australia, which is used as a
butter fat substitute for ice cream and confection. This Australian
product is replaced by dairy spread (DS) that Japan imported under the
current access last fiscal year with the major supplier being Australia.
It's just the same supplier, and the product having almost the same
properties, but falls under the different HS category. (Note that dairy
spread purchased last fiscal year is being released into the market this
year).

For Jan. -- Aug., Argentina made significant inroads into the market (up
169%) with inexpensive products. The situation also favored the United
States (up 34%). Frozen pizza, cream and other semi-hard and hard type
natural cheese, which are for direct consumption, did fairy well.

Helped by solid household demand for processed cheese, raw material
natural cheese imports (under Zero tariff TRQ), mostly from Australia
and New Zealand, did well for Jan. -- Aug. this year. Post expects this
category of trade will continue to do well serving domestic cheese
manufacturers to expand their local processed cheese production by
blending with the TRQ raw material natural cheese. Domestic cheese
manufacturing factories said to have been operating full capacity this
year with a majority producing processed cheeses.

### Table 7-a. Japanese Cheese Imports (Jan. -- Aug.)

  --------- ------------- ---------- ---------- ---------- ---------- ----------
  Unit:                                                               
  Metric                                                              
  Ton                                                                 

  Rank      Country       2004       2005       2006       \- 06/05 - \- 06/05 -

                          Jan/Aug    Jan/Aug    Jan/Aug    \% Change  Share

  0         \--World\--   141,859    139,628    132,138    -5%        100%

  1         Australia     63,753     64,468     55,414     -14%       42%

  2         New Zealand   32,697     34,552     36,513     6%         28%

  3         Germany       9,099      8,507      7,287      -14%       6%

  4         Denmark       7,805      7,087      6,429      -9%        5%

  5         Netherlands   7,018      5,311      5,506      4%         4%

  6         France        4,647      4,798      4,899      2%         4%

  7         Italy         3,524      3,407      3,579      5%         3%

  8         United States 3,015      2,406      3,232      34%        2%

  9         Argentina     105        1,146      3,078      169%       2%

  10        Others        10,195     7,944      6,201      -22%       5%

  Source of                                                           
  data:                                                               
  Japan                                                               
  Customs                                                             
  (World                                                              
  Trade                                                               
  Atlas)                                                              
  --------- ------------- ---------- ---------- ---------- ---------- ----------

### Table 7-b. Japanese Average Import Price of Cheese (Jan. -- Aug.)

  --------- ------------- ------------- ------------- ------------- -------------
  Unit: US                                                          
  Dollars                                                           
  per kilo                                                          
  gram                                                              

                                                                    \% Change

  Rank      Country       2004          2005          2006          \- 06/05 -

                          Jan/Aug       Jan/Aug       Jan/Aug       Jan/Aug

  0         \--World\--   3.1           3.44          3.48          1%

  1         Australia     2.49          2.85          2.91          2%

  2         New Zealand   2.38          2.84          2.89          2%

  3         Germany       2.8           3.2           3.11          -3%

  4         Denmark       4.43          4.8           4.72          -2%

  5         Netherlands   3.37          3.89          3.72          -4%

  6         France        7.47          7.32          7.15          -2%

  7         Italy         9.28          9.39          8.71          -7%

  8         United States 6.77          7.74          7.02          -9%

  9         Argentina     4.64          2.67          2.85          7%

  Source of                                                         
  data:                                                             
  Japan                                                             
  Customs                                                           
  (World                                                            
  Atlas)                                                            
  --------- ------------- ------------- ------------- ------------- -------------

### Table 7-c. Japanese Cheese Imports by Product Category (Jan. -- Aug.)

  ---------------- -------------- ------------ --------- --------- -------- --------- --------
  Unit: Metric Ton                                                                    
  (Customs                                                                            
  Clearance                                                                           
  Basis)                                                                              

  HS               Description                 2004      2005               2006      \- 06/05
                                                                                      -

                                               Jan/Aug   Jan/Aug   \% Chg.  Jan/Aug   \% Chg.

  \- WORLD -                                                                          

  0406 CHEESE AND                              141,859   139,628   -2%      132,138   -5%
  CURD                                                                                

  HS Category                                                                          

   040690          OTHER CHEESE                87,026    84,486    -3%      78,906    -7%
                   (A+B)                                                              

                   090            A. Outside   59,057    54,900    -7%      47,490    -13%
                                  TRQ                                                 

                   010            B. Under TRQ 27,969    29,586    6%       31,416    6%
                                  (Pooled                                             
                                  Quota)                                              

   040610          FRESH CHEESE                47,719    47,796    0%       44,710    -6%

   040620          CHEESE,                     2,885     2,878     0%       3,166     10%
                   GRATE/POWDER                                                       

   040630          CHEESE,                     3,762     4,001     6%       4,845     21%
                   PROCESSED                                                          

   040640          CHEESE, BLUE,               467       465       0%       511       10%
                   OTHER (A+B)                                                        

                   090            A. Outside   467       465       0%       511       10%
                                  TRQ                                                 

                   010            B. Under TRQ 0         0         \-       0         \-
                                  (Pooled                                             
                                  Quota)                                              

  For JFY 2006                                                                        
  (April 06 -                                                                         
  March 07), Japan                                                                    
  allocated 63,600                                                                    
  MT of natural                                                                       
  cheese TRQ, so                                                                      
  called Pooled                                                                       
  Quota (zero                                                                         
  tariff) as raw                                                                      
  material for                                                                        
  processed cheese                                                                    
  manufacturing.                                                                      
  Outside the                                                                         
  pooled quota,                                                                       
  tariff rates                                                                        
  vary by products                                                                    
  ranging 22.4% -                                                                     
  29.8%. Tariff on                                                                    
  processed cheese                                                                    
  is 40%.                                                                             

  Source of data:                                                                     
  Japan Customs                                                                       
  (World Trade                                                                        
  Atlas)                                                                              
  ---------------- -------------- ------------ --------- --------- -------- --------- --------

# Fluid Milk and PS&D Table

<table style="width:100%;">
<colgroup>
<col style="width: 18%" />
<col style="width: 7%" />
<col style="width: 7%" />
<col style="width: 7%" />
<col style="width: 7%" />
<col style="width: 7%" />
<col style="width: 7%" />
<col style="width: 7%" />
<col style="width: 7%" />
<col style="width: 7%" />
<col style="width: 11%" />
</colgroup>
<tbody>
<tr class="odd">
<td colspan="11"><p>Japan</p>
<h6 id="dairy-milk-fluid">Dairy, Milk, Fluid</h6></td>
</tr>
<tr class="even">
<td></td>
<td>2005</td>
<td>Revised</td>
<td></td>
<td>2006</td>
<td>Estimate</td>
<td></td>
<td>2007</td>
<td>Forecast</td>
<td></td>
<td>UOM</td>
</tr>
<tr class="odd">
<td></td>
<td>USDA<br />
Official</td>
<td>Post<br />
Estimate</td>
<td>Post<br />
Estimate<br />
New</td>
<td>USDA<br />
Official</td>
<td>Post<br />
Estimate</td>
<td>Post<br />
Estimate<br />
New</td>
<td>USDA<br />
Official</td>
<td>Post<br />
Estimate</td>
<td>Post<br />
Estimate<br />
New</td>
<td></td>
</tr>
<tr class="even">
<td>Market Year Begin</td>
<td></td>
<td>01/2005</td>
<td>01/2005</td>
<td></td>
<td>01/2006</td>
<td>01/2006</td>
<td></td>
<td>01/2007</td>
<td>01/2007</td>
<td>MM/YYYY</td>
</tr>
<tr class="odd">
<td>Cows In Milk</td>
<td>910</td>
<td>910</td>
<td>910</td>
<td>910</td>
<td>900</td>
<td>900</td>
<td>0</td>
<td>0</td>
<td>900</td>
<td>(1000 HEAD)</td>
</tr>
<tr class="even">
<td>Cows Milk Production</td>
<td>8285</td>
<td>8255</td>
<td>8285</td>
<td>8210</td>
<td>8210</td>
<td>8170</td>
<td>0</td>
<td>0</td>
<td>8150</td>
<td>(1000 MT)</td>
</tr>
<tr class="odd">
<td>Other Milk Production</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>(1000 MT)</td>
</tr>
<tr class="even">
<td>Total Production</td>
<td>8285</td>
<td>8255</td>
<td>8285</td>
<td>8210</td>
<td>8210</td>
<td>8170</td>
<td>0</td>
<td>0</td>
<td>8150</td>
<td>(1000 MT)</td>
</tr>
<tr class="odd">
<td>Other Imports</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>(1000 MT)</td>
</tr>
<tr class="even">
<td>Total Imports</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>(1000 MT)</td>
</tr>
<tr class="odd">
<td>Total Supply</td>
<td>8285</td>
<td>8255</td>
<td>8285</td>
<td>8210</td>
<td>8210</td>
<td>8170</td>
<td>0</td>
<td>0</td>
<td>8150</td>
<td>(1000 MT)</td>
</tr>
<tr class="even">
<td>Other Exports</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>(1000 MT)</td>
</tr>
<tr class="odd">
<td>Total Exports</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>(1000 MT)</td>
</tr>
<tr class="even">
<td>Fluid Use Dom. Consum.</td>
<td>4775</td>
<td>4800</td>
<td>4775</td>
<td>4680</td>
<td>4755</td>
<td>4665</td>
<td>0</td>
<td>0</td>
<td>4630</td>
<td>(1000 MT)</td>
</tr>
<tr class="odd">
<td>Factory Use Consum.</td>
<td>3429</td>
<td>3370</td>
<td>3429</td>
<td>3450</td>
<td>3370</td>
<td>3425</td>
<td>0</td>
<td>0</td>
<td>3440</td>
<td>(1000 MT)</td>
</tr>
<tr class="even">
<td>Feed Use Dom. Consum.</td>
<td>81</td>
<td>85</td>
<td>81</td>
<td>80</td>
<td>85</td>
<td>80</td>
<td>0</td>
<td>0</td>
<td>80</td>
<td>(1000 MT)</td>
</tr>
<tr class="odd">
<td>Total Dom. Consumption</td>
<td>8285</td>
<td>8255</td>
<td>8285</td>
<td>8210</td>
<td>8210</td>
<td>8170</td>
<td>0</td>
<td>0</td>
<td>8150</td>
<td>(1000 MT)</td>
</tr>
<tr class="even">
<td>Total Distribution</td>
<td>8285</td>
<td>8255</td>
<td>8285</td>
<td>8210</td>
<td>8210</td>
<td>8170</td>
<td>0</td>
<td>0</td>
<td>8150</td>
<td>(1000 MT)</td>
</tr>
<tr class="odd">
<td>CY Imp. from U.S.</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>(1000 MT)</td>
</tr>
<tr class="even">
<td>CY. Exp. to U.S.</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>(1000 MT)</td>
</tr>
</tbody>
</table>

# Non-Fat Dry Milk PS&D Table

<table>
<colgroup>
<col style="width: 14%" />
<col style="width: 8%" />
<col style="width: 8%" />
<col style="width: 8%" />
<col style="width: 8%" />
<col style="width: 8%" />
<col style="width: 8%" />
<col style="width: 8%" />
<col style="width: 8%" />
<col style="width: 8%" />
<col style="width: 11%" />
</colgroup>
<tbody>
<tr class="odd">
<td colspan="11"><p>Japan</p>
<p id="dairy-milk-nonfat-dry" class="heading">Dairy, Milk, Nonfat
Dry</p></td>
</tr>
<tr class="even">
<td></td>
<td>2005</td>
<td>Revised</td>
<td></td>
<td>2006</td>
<td>Estimate</td>
<td></td>
<td>2007</td>
<td>Forecast</td>
<td></td>
<td>UOM</td>
</tr>
<tr class="odd">
<td></td>
<td>USDA<br />
Official</td>
<td>Post<br />
Estimate</td>
<td>Post<br />
Estimate<br />
New</td>
<td>USDA<br />
Official</td>
<td>Post<br />
Estimate</td>
<td>Post<br />
Estimate<br />
New</td>
<td>USDA<br />
Official</td>
<td>Post<br />
Estimate</td>
<td>Post<br />
Estimate<br />
New</td>
<td></td>
</tr>
<tr class="even">
<td>Market Year Begin</td>
<td></td>
<td>01/2005</td>
<td>01/2005</td>
<td></td>
<td>01/2006</td>
<td>01/2006</td>
<td></td>
<td>01/2007</td>
<td>01/2007</td>
<td>MM/YYYY</td>
</tr>
<tr class="odd">
<td>Beginning Stocks</td>
<td>83</td>
<td>83</td>
<td>83</td>
<td>77</td>
<td>85</td>
<td>77</td>
<td>77</td>
<td>85</td>
<td>79</td>
<td>(1000 MT)</td>
</tr>
<tr class="even">
<td>Production</td>
<td>187</td>
<td>182</td>
<td>187</td>
<td>190</td>
<td>180</td>
<td>187</td>
<td>0</td>
<td>0</td>
<td>185</td>
<td>(1000 MT)</td>
</tr>
<tr class="odd">
<td>Other Imports</td>
<td>34</td>
<td>25</td>
<td>34</td>
<td>35</td>
<td>20</td>
<td>35</td>
<td>0</td>
<td>0</td>
<td>30</td>
<td>(1000 MT)</td>
</tr>
<tr class="even">
<td>Total Imports</td>
<td>34</td>
<td>25</td>
<td>34</td>
<td>35</td>
<td>20</td>
<td>35</td>
<td>0</td>
<td>0</td>
<td>30</td>
<td>(1000 MT)</td>
</tr>
<tr class="odd">
<td>Total Supply</td>
<td>304</td>
<td>290</td>
<td>304</td>
<td>302</td>
<td>285</td>
<td>299</td>
<td>77</td>
<td>85</td>
<td>294</td>
<td>(1000 MT)</td>
</tr>
<tr class="even">
<td>Other Exports</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>(1000 MT)</td>
</tr>
<tr class="odd">
<td>Total Exports</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>(1000 MT)</td>
</tr>
<tr class="even">
<td>Human Dom. Consumption</td>
<td>197</td>
<td>185</td>
<td>197</td>
<td>195</td>
<td>185</td>
<td>192</td>
<td>0</td>
<td>0</td>
<td>190</td>
<td>(1000 MT)</td>
</tr>
<tr class="odd">
<td>Other Use, Losses</td>
<td>30</td>
<td>20</td>
<td>30</td>
<td>30</td>
<td>15</td>
<td>28</td>
<td>0</td>
<td>0</td>
<td>25</td>
<td>(1000 MT)</td>
</tr>
<tr class="even">
<td>Total Dom. Consumption</td>
<td>227</td>
<td>205</td>
<td>227</td>
<td>225</td>
<td>200</td>
<td>220</td>
<td>0</td>
<td>0</td>
<td>215</td>
<td>(1000 MT)</td>
</tr>
<tr class="odd">
<td>Total Use</td>
<td>227</td>
<td>205</td>
<td>227</td>
<td>225</td>
<td>200</td>
<td>220</td>
<td>0</td>
<td>0</td>
<td>215</td>
<td>(1000 MT)</td>
</tr>
<tr class="even">
<td>Ending Stocks</td>
<td>77</td>
<td>85</td>
<td>77</td>
<td>77</td>
<td>85</td>
<td>79</td>
<td>0</td>
<td>0</td>
<td>79</td>
<td>(1000 MT)</td>
</tr>
<tr class="odd">
<td>Total Distribution</td>
<td>304</td>
<td>290</td>
<td>304</td>
<td>302</td>
<td>285</td>
<td>299</td>
<td>0</td>
<td>0</td>
<td>294</td>
<td>(1000 MT)</td>
</tr>
<tr class="even">
<td>CY Imp. from U.S.</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>(1000 MT)</td>
</tr>
<tr class="odd">
<td>CY. Exp. to U.S.</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>(1000 MT)</td>
</tr>
</tbody>
</table>

# Butter PS&D Table

<table>
<colgroup>
<col style="width: 16%" />
<col style="width: 8%" />
<col style="width: 8%" />
<col style="width: 8%" />
<col style="width: 8%" />
<col style="width: 8%" />
<col style="width: 8%" />
<col style="width: 8%" />
<col style="width: 8%" />
<col style="width: 8%" />
<col style="width: 10%" />
</colgroup>
<tbody>
<tr class="odd">
<td colspan="11"><p>Japan</p>
<h6 id="dairy-butter">Dairy, Butter</h6></td>
</tr>
<tr class="even">
<td></td>
<td>2005</td>
<td>Revised</td>
<td></td>
<td>2006</td>
<td>Estimate</td>
<td></td>
<td>2007</td>
<td>Forecast</td>
<td></td>
<td>UOM</td>
</tr>
<tr class="odd">
<td></td>
<td>USDA<br />
Official</td>
<td>Post<br />
Estimate</td>
<td>Post<br />
Estimate<br />
New</td>
<td>USDA<br />
Official</td>
<td>Post<br />
Estimate</td>
<td>Post<br />
Estimate<br />
New</td>
<td>USDA<br />
Official</td>
<td>Post<br />
Estimate</td>
<td>Post<br />
Estimate<br />
New</td>
<td></td>
</tr>
<tr class="even">
<td>Market Year Begin</td>
<td></td>
<td>01/2005</td>
<td>01/2005</td>
<td></td>
<td>01/2006</td>
<td>01/2006</td>
<td></td>
<td>01/2007</td>
<td>01/2007</td>
<td>MM/YYYY</td>
</tr>
<tr class="odd">
<td>Beginning Stocks</td>
<td>23</td>
<td>23</td>
<td>23</td>
<td>27</td>
<td>25</td>
<td>27</td>
<td>32</td>
<td>27</td>
<td>29</td>
<td>(1000 MT)</td>
</tr>
<tr class="even">
<td>Production</td>
<td>84</td>
<td>80</td>
<td>84</td>
<td>86</td>
<td>79</td>
<td>84</td>
<td>0</td>
<td>0</td>
<td>85</td>
<td>(1000 MT)</td>
</tr>
<tr class="odd">
<td>Other Imports</td>
<td>6</td>
<td>5</td>
<td>6</td>
<td>5</td>
<td>8</td>
<td>5</td>
<td>0</td>
<td>0</td>
<td>5</td>
<td>(1000 MT)</td>
</tr>
<tr class="even">
<td>Total Imports</td>
<td>6</td>
<td>5</td>
<td>6</td>
<td>5</td>
<td>8</td>
<td>5</td>
<td>0</td>
<td>0</td>
<td>5</td>
<td>(1000 MT)</td>
</tr>
<tr class="odd">
<td>Total Supply</td>
<td>113</td>
<td>108</td>
<td>113</td>
<td>118</td>
<td>112</td>
<td>116</td>
<td>32</td>
<td>27</td>
<td>119</td>
<td>(1000 MT)</td>
</tr>
<tr class="even">
<td>Other Exports</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>(1000 MT)</td>
</tr>
<tr class="odd">
<td>Total Exports</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>(1000 MT)</td>
</tr>
<tr class="even">
<td>Domestic Consumption</td>
<td>86</td>
<td>83</td>
<td>86</td>
<td>86</td>
<td>85</td>
<td>87</td>
<td>0</td>
<td>0</td>
<td>87</td>
<td>(1000 MT)</td>
</tr>
<tr class="odd">
<td>Total Use</td>
<td>86</td>
<td>83</td>
<td>86</td>
<td>86</td>
<td>85</td>
<td>87</td>
<td>0</td>
<td>0</td>
<td>87</td>
<td>(1000 MT)</td>
</tr>
<tr class="even">
<td>Ending Stocks</td>
<td>27</td>
<td>25</td>
<td>27</td>
<td>32</td>
<td>27</td>
<td>29</td>
<td>0</td>
<td>0</td>
<td>32</td>
<td>(1000 MT)</td>
</tr>
<tr class="odd">
<td>Total Distribution</td>
<td>113</td>
<td>108</td>
<td>113</td>
<td>118</td>
<td>112</td>
<td>116</td>
<td>0</td>
<td>0</td>
<td>119</td>
<td>(1000 MT)</td>
</tr>
<tr class="even">
<td>CY Imp. from U.S.</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>(1000 MT)</td>
</tr>
<tr class="odd">
<td>CY. Exp. to U.S.</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>(1000 MT)</td>
</tr>
</tbody>
</table>

# Cheese PS&D Table

<table>
<colgroup>
<col style="width: 16%" />
<col style="width: 8%" />
<col style="width: 8%" />
<col style="width: 8%" />
<col style="width: 8%" />
<col style="width: 8%" />
<col style="width: 8%" />
<col style="width: 8%" />
<col style="width: 8%" />
<col style="width: 8%" />
<col style="width: 9%" />
</colgroup>
<tbody>
<tr class="odd">
<td colspan="11"><p id="japan" class="heading">Japan</p>
<p>Dairy, Cheese</p></td>
</tr>
<tr class="even">
<td></td>
<td>2005</td>
<td>Revised</td>
<td></td>
<td>2006</td>
<td>Estimate</td>
<td></td>
<td>2007</td>
<td>Forecast</td>
<td></td>
<td>UOM</td>
</tr>
<tr class="odd">
<td></td>
<td>USDA<br />
Official</td>
<td>Post<br />
Estimate</td>
<td>Post<br />
Estimate<br />
New</td>
<td>USDA<br />
Official</td>
<td>Post<br />
Estimate</td>
<td>Post<br />
Estimate<br />
New</td>
<td>USDA<br />
Official</td>
<td>Post<br />
Estimate</td>
<td>Post<br />
Estimate<br />
New</td>
<td></td>
</tr>
<tr class="even">
<td>Market Year Begin</td>
<td></td>
<td>01/2005</td>
<td>01/2005</td>
<td></td>
<td>01/2006</td>
<td>01/2006</td>
<td></td>
<td>01/2007</td>
<td>01/2007</td>
<td>MM/YYYY</td>
</tr>
<tr class="odd">
<td>Beginning Stocks</td>
<td>15</td>
<td>15</td>
<td>15</td>
<td>15</td>
<td>15</td>
<td>15</td>
<td>15</td>
<td>15</td>
<td>15</td>
<td>(1000 MT)</td>
</tr>
<tr class="even">
<td>Production</td>
<td>36</td>
<td>37</td>
<td>36</td>
<td>36</td>
<td>38</td>
<td>37</td>
<td>0</td>
<td>0</td>
<td>37</td>
<td>(1000 MT)</td>
</tr>
<tr class="odd">
<td>Other Imports</td>
<td>212</td>
<td>215</td>
<td>212</td>
<td>205</td>
<td>210</td>
<td>200</td>
<td>0</td>
<td>0</td>
<td>200</td>
<td>(1000 MT)</td>
</tr>
<tr class="even">
<td>Total Imports</td>
<td>212</td>
<td>215</td>
<td>212</td>
<td>205</td>
<td>210</td>
<td>200</td>
<td>0</td>
<td>0</td>
<td>200</td>
<td>(1000 MT)</td>
</tr>
<tr class="odd">
<td>Total Supply</td>
<td>263</td>
<td>267</td>
<td>263</td>
<td>256</td>
<td>263</td>
<td>252</td>
<td>15</td>
<td>15</td>
<td>252</td>
<td>(1000 MT)</td>
</tr>
<tr class="even">
<td>Other Exports</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>(1000 MT)</td>
</tr>
<tr class="odd">
<td>Total Exports</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>(1000 MT)</td>
</tr>
<tr class="even">
<td>Human Dom. Consumption</td>
<td>248</td>
<td>252</td>
<td>248</td>
<td>241</td>
<td>248</td>
<td>237</td>
<td>0</td>
<td>0</td>
<td>237</td>
<td>(1000 MT)</td>
</tr>
<tr class="odd">
<td>Other Use, Losses</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>(1000 MT)</td>
</tr>
<tr class="even">
<td>Total Dom. Consumption</td>
<td>248</td>
<td>252</td>
<td>248</td>
<td>241</td>
<td>248</td>
<td>237</td>
<td>0</td>
<td>0</td>
<td>237</td>
<td>(1000 MT)</td>
</tr>
<tr class="odd">
<td>Total Use</td>
<td>248</td>
<td>252</td>
<td>248</td>
<td>241</td>
<td>248</td>
<td>237</td>
<td>0</td>
<td>0</td>
<td>237</td>
<td>(1000 MT)</td>
</tr>
<tr class="even">
<td>Ending Stocks</td>
<td>15</td>
<td>15</td>
<td>15</td>
<td>15</td>
<td>15</td>
<td>15</td>
<td>0</td>
<td>0</td>
<td>15</td>
<td>(1000 MT)</td>
</tr>
<tr class="odd">
<td>Total Distribution</td>
<td>263</td>
<td>267</td>
<td>263</td>
<td>256</td>
<td>263</td>
<td>252</td>
<td>0</td>
<td>0</td>
<td>252</td>
<td>(1000 MT)</td>
</tr>
<tr class="even">
<td>CY Imp. from U.S.</td>
<td>4</td>
<td>4</td>
<td>4</td>
<td>4</td>
<td>4</td>
<td>4</td>
<td>0</td>
<td>0</td>
<td>4</td>
<td>(1000 MT)</td>
</tr>
<tr class="odd">
<td>CY. Exp. to U.S.</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>(1000 MT)</td>
</tr>
</tbody>
</table>

#