Hanwoo Prices Jump to Double Digits... "Concerns Over Mid- to Long-Term Oversupply and Price Collapse"

[Image source=Yonhap News]

[Asia Economy Sejong=Reporter Kim Hyewon] Last year, the wholesale price of Hanwoo (Korean native cattle) surged by double digits. Although the supply volume of Hanwoo increased compared to the average year, the explosive rise in household consumption due to the spread of COVID-19, along with the distribution of disaster relief funds, caused demand for Hanwoo to grow even faster. Riding the wave of rising wholesale prices, producers' willingness to raise Hanwoo is also increasing, prompting calls for proactive supply and demand management.

The Ministry of Agriculture, Food and Rural Affairs announced on the 8th that, amid growing concerns over long-term oversupply and supply-demand instability of Hanwoo, it recently held the '2022 Livestock Outlook Conference' to discuss measures to stabilize Hanwoo supply and demand with academia and experts.

According to the Ministry, last year's Hanwoo supply volume (slaughtered) was 794,000 heads, a 6.2% increase compared to the average year (748,000 heads). The nationwide average wholesale price last year rose 17.9% from the average year (17,951 KRW/kg) to about 21,169 KRW per kilogram.

The number of Hanwoo raised also showed an increasing trend. Last year, the number of Hanwoo raised was 3.39 million heads, 14.1% more than the average year (2.97 million heads). The Korea Rural Economic Institute forecasted that, as producers' willingness to raise continues, the number of breeding cows producing calves and individuals under one year old will increase, raising the total number of Hanwoo raised to about 3.61 million heads by next year, 16.8% higher than the average year.

The supply volume is also expected to increase to about 990,000 heads by 2024 due to the rise in slaughterable individuals. Wholesale prices are expected to turn downward due to the impact of increased supply.

Experts foresee that the oversupply of Hanwoo will persist in the mid to long term. While wholesale prices are expected to decline, the decline could be greater than anticipated due to complex factors such as reduced demand following the recovery of daily life. They noted that last year's rise in wholesale prices despite increased supply was a special phenomenon caused by the spread of COVID-19. Accordingly, the government urged producers to refrain from calf stocking and participate in supply-demand adjustments such as reducing breeding cows.

Park Beomsu, Director of the Livestock Policy Bureau at the Ministry of Agriculture, Food and Rural Affairs, stated, "Due to the recent favorable Hanwoo prices, producers' willingness to raise has expanded, and oversupply is expected in the mid to long term. Additionally, feed prices have continued to rise since 2020 amid international grain price instability."

Director Park added, "We hope that producers and producer organizations take this situation seriously and that all farms actively participate in related supply-demand adjustment measures without hesitation to minimize management deterioration caused by future price declines."

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