May 14, 2008

 

South Korea sees lower beef prices but steady demand

 

 

Beef prices are declining and consumer demand is so far steady, industry experts said in the aftermath of South Korea's decision to resume imports of all US beef cuts. 

 

Despite fears about mad cow disease, hamburger chains and steak restaurants also have not experienced a slowdown.

 

At MacDonald's in Korea, more consumers are asking where the beef they are eating comes from, although there is no decline in beef demand, according to Yeom Hye-ji, manager of the public relations division of McDonald's Korea.

 

The bird flu cases, two of which happened in Seoul, the country's capital over the past week, caused food safety concerns to heighten. This is especially so after authorities moved to cull all poultry in the city.

 

South Korean restaurants, in a bid to assure skittish consumers are posting signs outside their restaurants declaring the origins of their beef, which comes mostly from Australia or New Zealand.

 

Meanwhile, Korean cattle farmers continue to suffer from high production costs and low demand.

 

The costly prices of Hanwoo, beef from Korean cattle means it is rarely consumed except on special occasions.

 

Moreover, the very reason that made Korean consumers wary of US beef has also made them more exercise more caution when eating Korean beef.

 

Kim Young-won, the Hanwoo Association official, said that sales of bones and internal parts like intestines, those sections deemed to carry higher risk of mad cow disease, have somewhat dampened.

 

Kim said the Korean cattle industry is not opposing imports but urging the government to ensure that the nation's beef supply chain is safe.

 

Since supermarkets are not required by law to indicate the origin of the beef they are selling, US beef could find its way into beef from other countries. This would heighten consumer concerns and turn them off eating beef altogether, he said.

Still, Hanwoo prices are declining in the wake of the government's decision to lift the ban on US beef imports.

 

According to the Hanwoo Association, prices of cattle have been depreciating since January 2006, South Korea allowed partial imports of US beef.

 

Cattle prices have dropped by half in the past two years and another 20-percent drop is expected, he said.