News last week that Japan is suffering its worst economic downturn in 35 years has ripple effects in Colorado, which counts the Asian nation among its biggest trading partners.

Japan last year ranked as Colorado's fifth-biggest export market, purchasing $336.29 million in commodities. That's a steep decline from the mid-1990s, when Japan was the state's largest trade partner with more than $800 million in exports.

The one bright spot in Colorado's trade relationship with Japan was exports in fresh and frozen beef, which are still gaining ground after Japan ended its mad cow ban in mid-2006. But the surge in beef exports wasn't enough to offset declines in almost every other major trade category - from automatic data-processing machines to instruments for quality control - which dragged down Colorado's 2008 exports to Japan by 6.3 percent from a year earlier.

"It's been a downturn overall in technology exports" to Japan, said Jim Reis, director of the World Trade Center Denver. "The strong yen over the years has forced Japan to manufacture more of their products, especially electronics, in places like China."

The upside of that shift is that Colorado has increased its exports to China, making it the state's third-biggest market in 2008 after Canada and Mexico.

Colorado's beef industry is heartened by the sharp rise in exports to Japan, with sales of fresh beef more than doubling and sales of frozen beef up 79 percent. But the market still has a long way to recover from its 2003 peak, when Japan consumed $1.4 billion of U.S. beef. During the ban that lasted more than two years because of mad cow disease, Australia, New Zealand and other countries filled the void left by America's absence.

"They got quite a good foothold during that time and we're still some distance behind," said Joe Schuele, spokesman for Denver- based U.S. Meat Export Federation.

All U.S. beef shipped to Japan must come from cattle age 20 months or younger because older animals are believed to be at greater risk from mad cow disease.

South Korea and other countries have a 30-month age limit, and U.S. industry officials are optimistic that Japan will raise its age limit this year.

Skylar Houston, who owns Aristocrat Reproduction Center in Platteville, sells about 150 to 175 steers each year to meat processor JBS Swift, which ultimately then sells the beef to Japan. If Japan were to raise its age limit to 30 months, Houston could include heifers among the animals his ranch sets aside for eventual sale in Japan.

Japan's economy shrank at an annual rate of 12.7 percent in the final three months of last year. The fourth-quarter report showed Japan's economic output plunging much more steeply than that of the U.S. or most European countries.

Even so, Colorado's beef industry is optimistic about the prospects of continuing to increase exports to Japan over the long term. The country's own domestic beef supply is "exceptionally expensive," while U.S. beef is far more modestly priced, said Terry Fankhauser, executive vice president of the Arvada-based Colorado Cattlemen's Association.

"If you look around the world, Japan and Korea and China still hold a lot of promise for exports" compared with other markets, he said.