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Is Japan's Wagyu Beef Bubble Bound to Burst?

Prices are skyrocketing, and many fear it’s not sustainable

Wagyu beef, which is often mislabeled as "Kobe." Photo: Carlos Osorio/Toronto Star via Getty Images Carlos Osorio/Toronto Star via Getty Images

Bad news for high-end beef lovers: Japan’s Wagyu bubble could be on the verge of bursting. Prized Wagyu calves are currently fetching wildly inflated prices, says Nikkei Asian Review, and "If sky-high beef prices start dipping, cattle breeders will find themselves operating in the red."

Wagyu calf auction prices have surged by some 50 percent from just two years ago. According to Nikkei, "Prices have reached levels where producers can barely turn a profit, but with employees to pay, they have no choice but to buy at high prices."

Even inferior quality cattle are currently fetching unreasonably high prices, thanks to dwindling populations fueled in part by aging farmers who are retiring without successors. (For that same reason, Japan is currently experimenting with autonomous tractors and other robotic farming technology.)

Japan’s beef industry isn’t the only one having problems: Thanks to a years-long drought, Australia is currently facing a long-term cattle shortage that has resulted in layoffs and a number of producers shutting down. Closer to home, U.S. beef prices hit an all-time high last year due to a drought-related shortage, though they’ve recently returned to more reasonable levels (and accordingly, red meat consumption is on the rise).

Wagyu Beef Under Threat [Nikkei Asian Review]

Watch: Everything You Need to Know About Wagyu Beef [E]