'Geumgyeopsal' Puts Triple Burden on Ordinary People... Price Expected to Reach 30,000 KRW per kg

1kg Samgyeopsal Consumer Price 28,630 KRW
Feed Prices Expected to Rise Due to Global Grain Price Increase
Price May Reach 30,000 KRW Range Due to Multiple Factors
Industry: "Temporary Phenomenon Due to Increased Demand"
Pig Farmers, Self-Employed, and Consumers Sigh

Due to the recent increase in the number of pigs slaughtered, the supply of pork has increased; however, 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 Song Seung-yoon] This year, the consumer price of Samgyeopsal (pork belly) is expected to exceed 30,000 KRW per kilogram for the first time ever. With the rise in international grain prices leading to an increase in feed costs, concerns are deepening not only among pig farmers but also among self-employed business owners handling pork and consumers.

Kim Jong-soo (38), a self-employed business owner running a meat restaurant in Anyang, Gyeonggi Province, is deeply worried about the recent sharp rise in pork prices. Since last year, raw material prices have started to increase, and he already raised the main menu prices once earlier this year. However, the price of Samgyeopsal has continued to soar. Having also raised alcohol prices, he fears that raising prices again will drive customers away, but keeping prices the same leaves no margin, causing him great concern.

Consumers are equally burdened. Jo Si-young (34), a housewife living in Gangseo-gu, Seoul, buys Samgyeopsal every week when grocery shopping, but the recent price surge has reduced her purchase frequency. The price difference with imported beef is now minimal, making her hesitant to buy.

According to the Livestock Products Quality Evaluation Service on the 10th, as of the previous day, the wholesale price of pork was 7,044 KRW per kilogram, up more than 24% from 5,637 KRW during the same period last year. The average retail price of Samgyeopsal also increased by over 11%, from 25,618 KRW to 28,630 KRW per kilogram. Compared to June 2019, before the COVID-19 outbreak (18,964 KRW), prices have risen by more than 50%.

Industry experts predict that due to various factors such as feed price hikes, the price of Samgyeopsal could exceed 30,000 KRW in the second half of this year. The average retail price of Samgyeopsal reached 29,590 KRW per kilogram on the 2nd of this month, the highest this year, approaching 30,000 KRW, but it has never surpassed that mark.

The main cause of the pork price increase is the rise in international grain prices due to Russia's invasion of Ukraine. As grain prices surged, feed costs rose, ultimately pushing up meat prices. Wheat produced in Russia and Ukraine accounts for one-third of global exports, and corn accounts for one-fifth. The domestic feed industry heavily depends on wheat and corn imported from Russia and Ukraine, making it highly susceptible to grain price increases. Given the expectation that the Russia-Ukraine war will not be resolved in the short term, this upward price trend is likely to continue for some time.

The industry also analyzes that the rapid surge in dining-out demand following the lifting of social distancing measures due to COVID-19 has contributed. The period from April to August each year sees a decrease in supply but an increase in demand, making it the most expensive season for Samgyeopsal. The anticipated additional feed price increase starting next month, due to rising international grain prices, is another factor driving prices up. Feed costs account for over 60% of pig production costs; thus, an increase in feed prices leads to higher production costs, which inevitably reflects in retail prices.

The Korea Pork Producers Association forecasts that pig production costs will rise by more than 100,000 KRW compared to last year in the second half of this year. The association previously stated in explanatory materials, "Just the increase in feed prices results in a loss of 60,000 KRW per pig compared to last year," and warned, "From the second half of this year, pork farmers will face severe operating deficits, and about 30% of pig farms may go bankrupt next year."

There are concerns that the recent outbreak of African Swine Fever (ASF) in Korea could further fuel pork price increases. ASF was first detected this year on the 26th of last month at a pig farm in Hongcheon-gun, Gangwon Province. The government is inspecting quarantine measures and making every effort to prevent its spread, but if it spreads nationwide, supply disruptions due to culling are inevitable.

In response to the situation, the government has also taken measures. On the 7th, the Ministry of Agriculture, Food and Rural Affairs announced a pork price stabilization plan that includes applying a tariff quota to reduce tariffs on 50,000 tons of imported pork. Additionally, a special feed purchase fund totaling 1.5 trillion KRW will be provided to farms at an interest rate of 1%. The plan aims to stabilize prices through tariff quota application and diversify import sources. However, since a significant portion of imported pork already comes from countries with zero tariffs under Free Trade Agreements (FTA), the scope of application is limited, leading to skepticism about the effectiveness of the measures.

An industry official stated, "The temporary rise in pork prices is due to a combination of factors such as rising international grain prices and increased demand from households and dining out, but many upward pressures like feed price hikes remain. This trend is expected to continue for the time being, so fundamental and effective measures, not just short-term fixes, are necessary."

Jo Dong-geun, honorary professor of economics at Myongji University, said, "The upward trend in pork prices is expected to continue for the time being. In the short term, financial support such as feed purchase funds for farms is necessary, but in the long term, consumers may turn to alternatives like chicken or beef."

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