Hanwoo and Gold Pork Belly Hit Record Highs with Disaster Relief Funds, Prices Expected to Drop This Chuseok

May Hanwoo Grade 1 Sirloin Consumer Price Hits Record High
Wholesale Price Drops Up to 16% Year-on-Year After Disaster Relief Fund Expiry
Pork and Chicken Demand Also Declines, Prices Expected to Fall After June

[Asia Economy Reporter Choi Saeng-hye] Prices of pork and Korean beef (Hanwoo), which surged significantly due to the COVID-19 pandemic, are expected to drop sharply in the second half of the year. Although the number of livestock and slaughtered animals is projected to increase compared to the previous year, demand is likely to decrease as the use of emergency disaster relief funds related to COVID-19 will end in August. Chicken prices are also expected to experience prolonged weakness due to a full-scale oversupply.

On the 2nd, the Ministry of Agriculture, Food and Rural Affairs stated, "By the end of this year, the Hanwoo livestock population is expected to increase by 3.7% from the previous year to 3.17 million heads, and the total number of slaughtered animals in 2020 is projected to rise by 3.3% from last year (765,000 heads) to 790,000 heads." They added, "In the difficult economic conditions expected in the second half of the year, supply will increase, and if demand decreases due to the special circumstances of COVID-19, there are concerns about supply-demand and price instability."

Source: Livestock Products Quality Evaluation Institute Livestock Distribution Information, Prices up to May 20, 2020

As COVID-19 spread and more people stayed home to eat, the wholesale price of first-grade Hanwoo beef rose 14.1% year-on-year to 19,805 KRW per kilogram from March to May. As of the 29th of last month, the consumer price of first-grade Hanwoo sirloin reached 97,319 KRW, marking the highest level since related statistics began in April 2011.

The Korea Rural Economic Institute’s Agricultural Outlook Division forecasts that if the domestic economic downturn worsens in the second half, the wholesale price of Hanwoo beef from June to August will remain around 18,000 to 18,500 KRW per kilogram, similar to the previous year. However, from September to November, when the government’s emergency disaster relief fund usage expires, prices are expected to fall by 13-16% to around 15,500 to 16,000 KRW per kilogram compared to the previous year.

Pork belly, which has been called "gold belly" due to its high price influenced by the African swine fever outbreak in China and COVID-19, is also expected to see price declines in the second half. The Agricultural Outlook Division noted that the wholesale price of pork, which was 2,923 KRW per kilogram in January before the COVID-19 outbreak, surged 71.2% to 5,003 KRW in May but is expected to decline after June. According to the ‘2020 Agricultural Outlook’ report, the per capita pork consumption this year is projected to be 26.6 kg, a 5% decrease from 28 kg last year.

The Agricultural Outlook Division explained, "In the second half, due to difficult economic conditions, the demand increase caused by COVID-19 will disappear, and pork prices may fall sharply." They added, "From October, prices could fall below production costs (3,698 KRW per kilogram based on 2019)." The division forecasts that the wholesale price of pork will adjust to around 4,695 KRW per kilogram in June and decline further to 3,632 KRW in October and 3,158 KRW in December.

Chicken prices are also expected to decline. According to the Korea Rural Economic Institute, the number of chickens slaughtered from June to November this year is projected to be 574.62 million, a 2.3% increase from 561.72 million during the same period last year. This is a 9.1% increase compared to the average of 526.81 million. Since the government’s emergency disaster relief fund payments began on the 11th of last month, consumption of relatively more expensive beef and pork has increased compared to chicken, causing chicken prices to already be on a downward trend. The Korea Rural Economic Institute stated, "There are concerns about prolonged price weakness due to full-scale oversupply in the second half."

This content was produced with the assistance of AI translation services.