May 29, 2008

South Korean livestock farmers feel impact of rising feed costs

The combination of declining meat demand and rising feed costs is giving South Korea's livestock farmers a hard time, according to a survey released by the National Statistical Office (NSO) on Wednesday (May 28, 2008).

The survey, which involves 1,400 farming households producing meat, eggs and milk, said pig farmers earn KRW 56,000 per head in 2007, down 41.7 percent from KRW 96,000 on-year.

Input costs have rose 3 percent last year but prices of cows and calves fell 17.7 percent and 5.6 percent respectively.

The survey said pig farmers spend an average of KRW 183,000 to produce 100 kg of pork, up 5.2 percent from KRW 174,000. However, they only earned KRW 221,000 per 100 kg, down 10.9 percent from KRW 248,000.

Cattle farmers have also seen prices fall to KRW 736,000 per head over the past year. While rising feed prices and other input costs played a role in hurting the profitability of livestock farming, the reopening of the South Korean market to US beef has dealt the most damage to the bottom line, according to the NSO.

More farmers have begun breeding animals to generate higher income due to rising meat demand from well-to-do Korean consumers but oversupply has pressurised meat prices, cutting into the earnings of livestock farmers, an NSO official said.

The official also expects public fear over bird flu and the safety issue of US beef would impact meat consumption, further hurting the earnings of livestock farmers.