Wholesale Prices Keep Falling Daily... But 'Geum Gyeopsal' Continues?

Reduced demand for school meals due to vacation and COVID-19
Despite falling pork farm prices
Consumption of popular cuts like Samgyeopsal jumps sharply

Due to the recent increase in the number of pigs slaughtered, the supply of pork has increased, but pork prices have risen amid increased consumption driven by disaster relief funds. On the 2nd, pork was displayed at the meat section sales counter of a large supermarket in Seoul. Photo by Kang Jin-hyung aymsdream@

[Asia Economy Reporter Seungjin Lee] While wholesale pork prices have been falling day by day, consumer prices are paradoxically rising. This is because, during the summer vacation period and due to the impact of the novel coronavirus infection (COVID-19), demand for school meals has decreased, while household consumption focused on pork belly and neck meat has increased.

According to the Livestock Products Quality Evaluation Institute's Livestock Distribution Information on the 30th, the consumer price of pork belly was recorded at 24,375 KRW per kg. The price, which was in the 22,500 KRW range per kg on the 13th, rose by nearly 2,000 KRW in just half a month. On the other hand, wholesale prices have been declining continuously. Pork (tangbak) traded at 5,454 KRW per kg in the wholesale market on the 13th fell by about 650 KRW to 4,806 KRW on the 29th, widening the gap between consumer and wholesale prices day by day.

According to the livestock industry, this phenomenon generally occurs during the summer vacation period. Less popular cuts such as hind legs, excluding popular parts like pork belly and neck meat, are mostly consumed in school meals. However, as the vacation begins, demand for these less popular parts, which make up a significant portion of the pig, decreases, causing the pork production area prices to start falling. Intermediate distributors who have to store the less popular parts due to the drop in demand reflect the additional costs in the prices of pork belly and neck meat, resulting in a temporary price increase during the summer vacation period, which returns to normal prices after the vacation ends.

Price trends of pork wholesale and retail from July 13 to July 29. (Source: Livestock Products Quality Evaluation Institute)

The problem is that the impact of COVID-19 continues. Regardless of the summer vacation period, demand for school meals has decreased, intensifying the backlog of less popular parts. On the other hand, consumption of pork belly and neck meat has greatly increased due to disaster relief funds, and recently, with camping gaining popularity as a summer vacation activity, consumption of these parts has become even more concentrated.

In this situation, both pig farmers and consumers are increasingly dissatisfied. Consumers are frustrated as pork prices rise daily, while pig farmers cannot receive fair prices at the production site despite the increase in consumer prices. Industry insiders are also caught in a dilemma. If prices for popular parts like pork belly and neck meat are lowered, consumption may concentrate even more on these parts, causing prices to fluctuate more dramatically.

An industry insider explained, "Due to African swine fever, the number of pigs raised decreased last year, and we increased the number of pigs to prevent a sharp price surge, but an unexpected situation like COVID-19 occurred." The insider added, "If this phenomenon continues, the government may need to intervene in the market," and "The food and distribution industries also need to work on demand adjustment by developing products using less popular parts."

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