September 24, 2012

 

 

The overall prices of livestock including cattle, pigs and chickens in South Korea are declining due to oversupply of the said livestock.

 

The nation's livestock are suffering from plummeting prices as the total number of cattle, pigs and chickens being raised are nearing at a record-high figure, according to an industry source Friday (Sep 21). The economic difficulties and the subsequent weakened consumption are also fuelling such falling prices. These developments are triggering mounting concerns that the decrease in prices can possibly prolong into the beginning of next year, not a temporary phenomenon.

 

In addition to the dip in livestock prices, there was a sharp rise in international animal feed prices, adding further burden to livestock farmers.

 

Market prices for Hanwoo cattle (Korea's native cattle breed) weighing 600 kilogrammes are estimated at KRW3.37 million (US$3,020), a 10% fall from last year's KRW3.75 million (US$3,347), and a 22.6% slide from 2010's KRW4.85 million (US$4,329), according to the data released by Korea's National Agricultural Cooperative Federation (Nonghyup). The drop in prices is also apparent in pork and chickens.

 

The nation's auction prices for pork (one kilogramme) dropped 36.2% from the previous year's KRW5,384 (US$4.81) to KRW3,430 (US$3.06) as of September 18, the same data showed. The wholesale prices for chicken also went down to KRW2,906 (US$2.60), marking a 10% drop from the same period a year ago of KRW3,229 (US$2.88).

 

The reason for the overall declines in livestock prices stemmed from a skyrocketing number of livestock across the nation.

 

As of September, a record number of 3.06 million Hanwoo cattle are being raised in Korea. This came from cattle farmers who turned their eyes to Hanwoo calves with the prices of Hanwoo cattle prices rising up until 2010. The price drop was predictable consequences back in September in 2010. A rising number of cattle caused the imbalance between supply and demand. Furthermore, the government stepped in fixing Hanwoo cattle prices as foreign beef flowed into the domestic market.

 

In the case of pigs, the nation-wide foot-and-mouth disease led to the slaughter of 30% of pigs. After this move, pig farmers flock to engage in pig farming in drove, resulting in a total number of pigs being at 9.6 million heads as of September this year. The figure is close to a record high of 9.9 million in September 2010.

 

Situations with chicken are not much better. Even with the chicken supply remaining unchanged, chicken producers are moving to expand their chicken factory farms, prompting fears over an excessive supply. The poultry industry had increased chicken supply, judging that seasonal factors such as the Olympics may well boost the supply. Unexpectedly, the supply outstripped the demand, causing a vicious cycle of falling prices in the end.

 

The Korea Swine Association, the Hanwoo Association, and the Korea Poultry Association are launching grand-scale promotions and encouraging livestock consumption among consumers as a way of curbing further price declines.