As Hanwoo Prices Become Burdensome, Consumer Demand Surges
Middlemen Delay Supply Amid Expectations of Further Price Increases
As the price of Hanwoo continues to soar, the price of imported beef is also rising daily. Although imports were significantly increased to stabilize prices, it has been found that instead of releasing the supply into the market during distribution, more cases are heading to frozen warehouses, causing prices to steadily increase.
Increased Imports and Soaring Prices
According to the Livestock Products Quality Evaluation Institute on the 3rd, the total amount of beef imported into the country last July was 38,455 tons, a 9.3% increase from 35,192 tons during the same period last year. Among the imports, U.S. beef accounted for more than half at 54.9%, and Australian beef made up 37.7%. The price of imported beef also rose significantly; based on U.S. frozen ribs, the price increased from 2,363 KRW per 100g in July last year to 2,562 KRW in July this year, an 8.4% rise.
Data from the Korea Customs Service and the Korea Rural Economic Institute also show that beef imports totaled 250,611 tons and amounted to 1.7274 billion USD in the first half of this year. This represents a 9.0% increase in volume and a 15.1% increase in value compared to 229,920 tons and 1.5104 billion USD in the first half of last year, respectively.
Consumers are feeling the price increase even more. According to Agricultural Products Distribution Information (KAMIS), the price of U.S. frozen ribs rose from 2,475 KRW per 100g at the beginning of the year to 2,581 KRW as of early September. Australian chilled ribs also surged 11.4%, from 2,413 KRW to 2,689 KRW. For the popular holiday item LA ribs, prices at the retail market in Majang-dong, Seoul, which were between 25,000 and 30,000 KRW per kilogram during last year’s Chuseok, have already soared to the 40,000 KRW range this year. The recently popular Tomahawk cut has nearly doubled in retail price from 35,000 KRW in March to 65,000 KRW currently.
A merchant at Majang-dong Livestock Market said, "Frozen LA ribs, which were wholesale priced at 15,200 KRW during last year’s Lunar New Year, are now coming in at 25,000 KRW," adding, "Since we cannot receive as much supply as we want, prices are expected to continue rising until the holiday in mid-month."
Prices Rise, Heading to Frozen Warehouses
The main reason for the increase in imported beef prices is the surge in demand. As Hanwoo prices soared, more people sought relatively cheaper imported beef, and with expectations that both demand and prices will remain strong for the time being, large importers and intermediate distributors are delaying supply, further driving up prices. Unlike chilled meat, which has a maximum shelf life of three months including import processes, imported frozen meat can be distributed for up to two years.
A representative from a Majang-dong livestock wholesale company, A, pointed out, "The price of LA ribs has continued to rise slightly every week even this summer," adding, "Although imports have been somewhat disrupted since COVID-19, importers and middlemen are holding back inventory because they expect prices to rise further."
Beef prices are expected to continue rising after Chuseok as well. A representative from the Korea Rural Economic Institute explained, "Due to increased feed costs, the offer prices from overseas meat exporters have risen significantly," adding, "In particular, for Korea, beef imports are practically limited to the U.S. and Australia, and pork imports mainly come from the EU or the U.S. If supply delays occur locally after COVID-19, import disruptions are inevitable, which will act as a factor of price instability."
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