S. Korea Govt Blames Producers For Poor Prices

ANALYSIS - Despite beef and cattle prices reaching record highs across the world, the situation in South Korea is quite different, writes TheCattleSite editor Charlotte Johnston.
calendar icon 4 January 2012
clock icon 2 minute read

Over the past year cattle prices have plummeted 20 per cent.

Producers are blaming growing beef imports for undercutting domestic prices. Beef imports increased 20 per cent in 2011, with a 66 per cent volume increase coming from the US and 31 per cent from Australia. Australia holds the largest share of the Korean market.

The government disagrees, saying that the supply of domestic cattle outweighs demand pushing prices down. With this in mind the government believes that culling 30 per cent of the national breeding herd will help increase market prices in the long run. However producers fear the situation will worsen once the South Korea-US free trade agreement (FTA) is fully implemented.

To protect producers from the negative effects of FTAs the government has announced plans to provide fiscal support for domestic agricultural producers who suffer losses caused by imported products under free trade deals.

The government is offering financial incentives to producers, who cull breeding animals. This cull would boost beef supplies in the short run, and likely push prices down even further. To counteract this the government is expected to launch a campaign to encourage South Koreans to increase beef consumption.

It is not known yet how the industry has responded to the proposal to reduce the breeding herd. Earlier in the year 110,883 head of cattle were culled to contain the foot and mouth disease outbreak that hit the country in November 2010.

After the outbreak the government struggled to control prices as supply shortages hit the country and encouraged producers to rebuild the national herd.

Not even a year later the South Korean government has changed its tune. Is it using the expansion of the national herd as an excuse for falling cattle and beef prices, instead of looking at the effects that ever increasing beef imports are having on cattle producers and the local industry?

Charlotte Johnston, Editor

Charlotte Johnston - Editor

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