FTA threat enough to hurt beef producers
The Hankyoreh, Seoul
FTA threat enough to hurt beef producers
4 May 2007
South Korea and the United States have yet to ratify a bilateral free trade agreement (FTA), but South Korean beef producers are already in a state of collapse. Wholesale prices of South Korean beef, or hanu, continue to plunge as producers dump beef on the market, fearing over an influx of American and Canadian beef.
According to data by the National Agricultural Cooperative Federation (NACF), the average wholesale price of a female hanu calf dropped 27 percent, to 2,101,000 won, as of May 2, compared 2,878,000 won in January. The price of a 600-kilogram female hanu fell 13 percent to 4,767,000 won from 5.48 million won. The price of a male hanu calf declined 13.3 percent to 2,012,000 won from 2,321,000 won.
The plunge in wholesale prices is seen a reflection of fears by livestock farmers after the South Korea-U.S. FTA. Typically, it takes two to three years for a calf to grow to a 600-kilogram hanu. So, the price decline is affecting female calves, male calves, cow and bulls, in that order.
In fact, the mass-selling of hanu is a nationwide phenomenon. Sim Seong-gu, 54, a livestock farmer at Hongseong in South Chungcheong province, said, "Farmers are struggling to sell cattle. In general, a bull is castrated after two years. But, prices are falling further as farmers are selling bulls without castration." Min Jae-gi, head of the Hongseong Hanu Association, said, "Some even butcher cows in pregnancy. Farmers aren’t willing to raise cattle due to the worries." Jang gi-su, 49, who has raised cattle for 13 years in Namwon of North Jeolla province, said, "In the past, I can buy three calves after selling two cows. But now, I can buy four calves when I sell two cows."
Amid concerns, imports of beef are expected to surge. During the first quarter of this year, imports of Australian beef jumped 29 percent, to 46,024 tons. What’s more, the government plans to import Canadian beef, following the resumption of U.S. beef imports. South Korean Minister of Foreign Affairs and Trade, Song Min-soon, told Canada Foreign Minister Peter MacKay that South Korea will resume imports of Canadian beef, the Wall Street Journal reported on May 3. The Ministry of Agriculture and Forestry has already announced that it will positively consider importing bone-in beef if the World Organization for Animal Health determines later this month that the risk of mad cow disease is very low in both Canada and the U.S.
Market experts expect the full-resumption of American and Canadian beef imports to pose irreversible damage to domestic livestock farmers. Kim Seong-ho, an official at NACF, said, "Amid widespread concerns over an influx of U.S. beef, some wholesale markets can’t even set a price range." Park Hong-sik, an official at the Ministry of Agriculture, said, "Fears are flared up after the settlement of FTA and reports on resumption of U.S. beef imports, while there is no disruption in supply and demand as the small amount of U.S. beef shipments come in." Park said the ministry is working to appease farmers’ concerns.
Meanwhile, unlike the plunge in wholesale hanu prices, retail prices of hanu beef are slightly changed. According to the Korea Agro-Fisheries Trade Corp. prices of the first-grade hanu rib and Australian rib fell 3.7 percent and 5 percent each, compared with January.
