Cattle Numbers Down, Exchange Rates Up... Beef Prices Skyrocket

Hanwoo Tenderloin and Sirloin Retail Prices Up Over 10% Year-on-Year
Supply Shortage Driven by Fewer Cattle Raised and Slaughtered
Imported Beef Prices Also Rising Due to Strong Exchange Rate
Ongoing Middle East Conflict Expected to Prolong Price Instability

The price of beef, which saw a slight decline ahead of last month’s Lunar New Year holiday, is rebounding. This stands in contrast to the stabilization of vegetable and processed food prices, which are benefiting from milder weather and the government's efforts to keep food prices in check. As a result of the strong won-dollar exchange rate, imported beef prices are also on the rise. The distribution industry is closely monitoring the situation, as a prolonged war, sparked by U.S. and Israeli airstrikes on Iran, could push prices even higher.

Meat sales counter at a large supermarket in Seoul. Photo by Yonhap News

According to the Livestock Products Quality Assessment Service on March 6, as of March 4, the retail price per 100g of Hanwoo (Korean beef) grade 1+ tenderloin was 15,247 won, up 10.8% from the same period last year. Sirloin also reached 12,361 won per 100g, a 13% increase from a year ago. Retail prices for these cuts appeared to stabilize ahead of the holiday, each dropping by about 2,000 won per 100g compared to early last month. However, as soon as the holiday ended, prices rebounded and remain at higher levels than last year.

Industry experts attribute the increase in retail beef prices to a decline in Hanwoo cattle breeding and slaughter numbers, which has led to reduced supply. According to the Korea Rural Economic Institute’s livestock outlook, as of December last year, the number of Hanwoo cattle being raised was estimated at 3,211,000, down 4.7% compared to the same period the previous year. The number of cattle slaughtered in the fourth quarter of last year stood at 2 million, a 19.4% decrease from the year before. This trend is expected to continue this year, with the annual number of cattle being raised projected to fall by 1.9% to 3,150,000, and the number slaughtered by 8.4% to 862,000.

As of the previous day, the wholesale price of Hanwoo was 21,406 won per kg, 24.4% higher than the previous year and 19.1% higher than the average year. This rise is much steeper than that of pork, which increased by only 1.4% compared to the average year. Since wholesale prices typically affect retail prices with about a one-week lag, Hanwoo retail prices are also expected to remain higher than usual this month.

Imported beef, which serves as a substitute for domestic beef, is not much cheaper. For example, as of March 4, the retail prices per 100g of frozen short ribs from Australia and the United States were 4,441 won and 4,192 won, respectively, both up more than 7% from the same period last year. Although demand for imported beef has increased and import volumes have grown, the strong won-dollar exchange rate has driven up import costs, contributing to the price hikes. According to the Korea Rural Economic Institute, from January to November last year, beef imports totaled 425,000 tons, a 4.7% increase from the same period the previous year. During that period, the average import price for beef also rose 1.9% to $8.2 per kg.

Burger franchises, both domestic and international—including Burger King, McDonald's, and Mom's Touch—have raised product prices, citing increased costs for patties and other raw materials. This contrasts with the government's efforts to lower prices for processed foods: On February 11, the government established the Special Task Force on Livelihood Prices, chaired by Deputy Prime Minister and Minister of Economy and Finance Koo Yuncheol and vice-chaired by the head of the Korea Fair Trade Commission, to monitor the prices of essential goods. The government has also uncovered collusion among flour and sugar manufacturers, leading to lower prices for processed food items.

If the war in the Middle East drags on, it could impact imported meat prices as well. A representative from a major supermarket commented, "There is no immediate problem because frozen and processed foods are stocked and sold on a quarterly or half-year basis. However, if the situation continues for more than a month and exchange rates and shipping costs rise further, it could result in increased costs or supply issues for imported product lines."

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