September 17, 2007

Surging imports ahead of festival plunge Korean beef prices

The rush in selling cattle in anticipation for lower prices as well as surging imports for South Korea's Chuseok thanksgiving holidays sink Korean beef prices, according to National Agricultural Cooperative Federation. 

The federation says imports of female calves fell by 2.06 million won (US$2,211), a drop of more than 28 percent from 2.88 million won in January. Bull calves, which relatively require a shorter breeding period, have declined by 13 percent to 20.3 million won from 23.2 million won also in January. The statistics are based on the prices before being sent to the retail market.

In previous years, Korean beef prices soar ahead of Chuseok festival due to increasing demand. According to Kim Young-won, the deputy chief of the Korea Hanwoo Association, beef farmers have already been "extremely sensitive" on their livelihood prospects due to upcoming free trade agreements with the US and other countries.

Fearing that future market opening could cause steeper drops in beef prices, cattle growers are hastily selling off their stock leading to market oversupply. Kim said farmers normally wait at least three years, allowing their cows to give birth up to three times before putting cows on sale. Now this production period has been shortened for just two years, he said.

Kim added the situation would remain unless US beef is again banned. Korea eased its ban on US beef imposed over fears of mad cow disease in January 2006, limiting imports to boneless cuts from cows aged 30 months or younger.