Seoul Livestock Products School Meals to Apply Standard Pricing Model from September

Establishing a Fair and Transparent Price Calculation Basis Using Data from the Animal Products Quality Evaluation Institute

[Asia Economy Reporter Jong-il Park] The Seoul Agro-Fisheries & Food Corporation (President Kim Kyung-ho) and the Livestock Products Quality Evaluation Service (President Jang Seung-jin) plan to fully apply the "Standard Model for Pricing Livestock Products for School Meals" (hereinafter referred to as the Standard Model), developed to enhance fairness and transparency in pricing livestock products for school meals, to Seoul's school livestock meal supply starting in September.

As of 2019, 771 schools in Seoul received livestock products through the Eco-friendly Distribution Center under the Seoul Agro-Fisheries & Food Corporation, with a total volume of 4,867 tons and a value of approximately 63.559 billion KRW.

The Corporation and the Livestock Products Quality Evaluation Service signed a business agreement in November 2018 to establish a school meal system that transparently supplies safe livestock products and contribute to creating a sustainable domestic livestock industry foundation. Since May 2019, they have formed a practical TFT including Gyeonggi Province and Sejong City to develop the Standard Model.

To ensure accuracy in pricing livestock products for school meals, the Livestock Products Quality Evaluation Service and the Corporation investigated yield and transaction prices by part and grade for 23,715 heads of Korean cattle (Hanwoo) and 553,574 pigs. They analyzed various expenses such as slaughtering fees, transportation costs, packaging fees, and labor costs incurred during slaughtering, processing, and transportation, as well as distribution costs occurring in the delivery process to schools by suppliers and delivery companies.

Additionally, a draft of the Standard Model was prepared in September last year, and it was pilot-applied for simulation in price calculation until May this year to verify its accuracy.

The newly developed Standard Model links the delivery price of livestock products to the auction prices of cattle and pigs announced by the Livestock Products Quality Evaluation Service. This method significantly improves upon the previous approach, which determined the bid price by comparing retail prices surveyed at individual schools with quotes from suppliers.

The Corporation and the Livestock Products Quality Evaluation Service unveiled the Standard Model at the "Symposium on the Development of the Standard Model for Pricing Livestock Products for School Meals" held in June. Discussants recognized the fairness and accuracy of the Standard Model and called for its prompt field application and nationwide expansion.

In particular, on July 23, the Corporation approved the Standard Model as originally proposed at the 6th Price Deliberation Committee meeting, which included participants from Seoul City, the Seoul Metropolitan Office of Education, and schools involved in school meals, deciding to apply the model starting with prices for the second semester in September.

Furthermore, the Livestock Products Quality Evaluation Service and the Corporation plan to strengthen cooperation to facilitate the spread of the model to other local governments, including Sejong City and Gyeonggi Province.

President Kim Kyung-ho stated, "We expect this Standard Model to serve as an alternative to the previously challenging pricing of livestock products for school meals," and added that they will actively work with the Livestock Products Quality Evaluation Service to ensure the pricing model is used not only in Gyeonggi Province and Sejong City, which participate in the TFT, but also nationwide in school meals.

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