No.1 Nonghyup Feed Lowers Compound Feed Price by 500 Won per Sack... Expecting Chain Effect

[Asia Economy Sejong=Reporter Kim Hyewon] This year, livestock farms have faced management difficulties due to soaring feed prices, and Nonghyup Feed, the market leader, will reduce the price of mixed feed by 500 KRW per bag (25kg). Other companies are also likely to join the feed price reduction trend, and it is analyzed that the overall industry will see a feed cost saving effect of over 10 billion KRW per month.

The Ministry of Agriculture, Food and Rural Affairs announced on the 16th that Nonghyup Feed will reduce the price of mixed feed by 20 KRW per kg, an average of 3.5%, starting from shipments on the 19th.

A Nonghyup Feed official explained, "Although grain prices and exchange rates have somewhat stabilized recently, volatility remains high, making price reductions difficult. However, due to increased production costs and falling livestock prices, the livestock industry is in crisis, so we proactively lowered prices twice as much as originally planned and advanced the timing by 10 days."

International grain prices, which surged this year due to the Russia-Ukraine conflict, peaked in July and have since been declining. Accordingly, domestic mixed feed prices for livestock have also passed their peak in September-October and are on a downward trend with some delay. The average price of mixed feed for livestock reached 705 KRW per kg in September but decreased by 2 KRW per kg in October. However, the average price this year remains around 635 KRW per kg, higher than last year (525 KRW) and 2020 (479 KRW).

With a market share of 17.4%, Nonghyup Feed’s price reduction is expected to influence other general feed companies as well. A Ministry of Agriculture, Food and Rural Affairs official predicted, "The feed price reduction, which accounts for 50-60% of livestock production costs, will reduce production costs by about 5.6 billion KRW per month for livestock farms using Nonghyup Feed."

In addition to Nonghyup Feed, representative OEM feed companies Dodram (for pigs) and Daehan Hanwoo (for Korean beef cattle) have also reportedly reduced prices by 7 KRW and 5 KRW per kg respectively this month compared to the previous month, reflecting lower raw material costs.

A Daehan Pork Association official said, "The monthly consumption of pig feed is about 580,000 tons, so if feed prices are reduced by 20 KRW per kg, a feed cost saving effect of 11.6 billion KRW per month is expected across the industry."

Kim Jungwook, Director of Livestock Policy Bureau at the Ministry of Agriculture, Food and Rural Affairs, stated, "The government will continue to prepare supply and demand stabilization measures such as securing alternative raw materials, diversifying overseas supply chains, and expanding domestic forage production to stabilize feed prices."

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