This Time, the Government Meets the Feed Industry Urging "Proactive Price Reduction"

Meeting with 8 Compound Feed Manufacturers and Others

At the end of last month, the government, which met with the flour milling industry, this time met with feed manufacturers to urge price reductions.

On the 6th, the Ministry of Agriculture, Food and Rural Affairs held a meeting with eight compound feed manufacturers and others at the Korea Feed Association to discuss measures to stabilize feed prices and reduce the feed cost burden on livestock farms, the ministry announced on the 7th.

Earlier, the ministry expanded financial support to livestock farms and feed companies to stabilize feed prices in response to rising international grain prices. This year, out of the 1 trillion won scale of farm feed purchase funds (interest rate 1.8%), 745 billion won was prioritized for execution in March, and 62.7 billion won of raw material purchase funds (interest rate 2.5~3.0%) was fully allocated early to feed companies in April.

Additionally, through consultations with related ministries, from last month, additional tariff quota items (150,000 tons of distillers dried grains with solubles, 45,000 tons of palm kernel meal) were added to reduce raw material import costs (tariff 2% → 0%), and from this month, about 5.5 billion won worth of manufacturing cost reductions are being supported through the supply of government-managed grains for feed use (70,000 tons).

At the meeting, the ministry expressed gratitude to the feed industry for proactively reflecting the decline in grain prices and exchange rates since December last year and participating in feed price reductions to stabilize livestock farm management. It also requested cooperation to ensure that the recent decline in grain prices can be reflected early in compound feed prices. The average price of compound feed has decreased from 703 won per kilogram in September last year to 674 won in May this year.

According to the ministry, the feed industry representatives attending the meeting agreed that although each company holds a considerable amount of high-priced raw material inventory and low-priced grains are expected to arrive after the fourth quarter, limiting the room for price reductions, they will strive to ensure that the decline in import prices of major feed grains such as corn is reflected early in the spirit of coexistence with livestock farms.

The feed industry proposed expanding support for feed raw material purchase funds at this meeting. Seo Jun-han, Director of the Livestock Environment Resources Division at the Ministry of Agriculture, Food and Rural Affairs, said, "The government will also actively work to resolve the industry's difficulties," adding, "Going forward, the government and the feed industry will maintain close communication to stabilize livestock farm management and livestock product prices."

Meanwhile, on the 26th of last month, the ministry met with flour milling companies such as CJ CheilJedang and Daehan Flour Mills to request consideration of price reductions in flour prices following the decline in wheat import prices. At that meeting, the flour milling industry expressed a position to review the possibility of price reductions in July, and in fact, Daehan Flour Mills lowered the prices of major products by an average of 6.4% on the 1st of this month.