Compound Feed Price Reduced by 625 Won per Sack... Hanwoo Farmers Save 7.3 Billion Won on Feed Costs

Reflecting International Grain Price Decline and Exchange Rate Stability

[Asia Economy Reporter Joo Sang-don] The Ministry of Agriculture, Food and Rural Affairs announced on the 16th that the compound feed industry has been consecutively lowering prices recently due to the stabilization of international grain prices and exchange rates.

First, Nonghyup Feed Co., Ltd. lowered the price by 500 KRW per bag (25 kg) in December last year and further reduced the price by 625 KRW (25 KRW/kg) per bag starting from shipments on the 10th. As a result, 62.1% of Korean beef farms, which have a high purchase ratio of Nonghyup and livestock cooperative feed, can save an additional 7.3 billion KRW monthly on feed costs.

With Nonghyup Feed holding a 22% market share last year and consecutively lowering prices, other feed companies are also joining in the price reductions. Some companies are currently considering lowering prices by about 20 KRW per kilogram across all livestock categories starting next week.

The Ministry of Agriculture, Food and Rural Affairs reports that the international feed grain prices have been declining since the peak in July last year (based on the import month), mainly due to the price drops of corn and soybean meal, which account for more than 60% of the raw materials for compound feed. Feed corn prices fell from 404 USD per ton in July last year to 336 USD per ton in January this year, a decrease of about 16.8%. The average USD-KRW exchange rate dropped by 12% from its peak in October last year to January this year, accelerating the timing of feed price reductions.

A Nonghyup Feed official stated, "Although grain prices and exchange rates have somewhat stabilized recently, volatility such as exchange rates remains high, making price reductions difficult. However, the priority is the management stability of livestock farms. The feed industry is proactively responding to reduce livestock production costs and is absorbing losses, so continuous participation from related industries is necessary."

The Ministry of Agriculture, Food and Rural Affairs is actively encouraging not only Nonghyup Feed but also member companies of the Feed Association to lower feed prices through monitoring international grain prices, exchange rates, business performance of the feed industry, and conducting interviews with feed industry managers. Livestock organizations are also continuously appealing the difficulties of livestock farms by sending official letters urging feed price reductions or issuing statements.

Kim Jung-wook, Director of Livestock Policy at the Ministry of Agriculture, Food and Rural Affairs, said, "We will continue to communicate with the feed industry to ensure that any additional factors for feed price reductions are reflected in prices promptly." He added, "The government will promote feed cost reduction and management stability for farms by expanding support for feed and raw material purchase funds this year and increasing self-mixed feed using agricultural and food by-products."