Animal Numbers, Swine

Production:

The efforts by Korean swine producers to reduce sow numbers in 2013, coupled with an increased PED outbreak during the first half of 2014, have kept total swine inventory numbers low up through the first half of 2014. Total swine inventory that was 10,188,000 head in September 2013, came down to 9,680,000 head in June, 2014. The effect from reducing sow numbers that began in the second half of 2013 was already expected to dampen the total inventory during the first half of 2014, considering the 4 month gestation period and about 6 months needed to raise the piglets. As carcass prices began to rise in March 2014 due to low swine inventory, farmers began to increase their herd size during the second half of 2014 and the total inventory returned to over 10 million head that is equal to the level when the sow reduction program began in September 2013. However, due to the 10 month lag between the time when farmers begin to increase their herd size to the point where it is ready for slaughter, the increased inventory will not show an increase in pork production until May 2015. As the effect from high inventory on carcass prices will not show until the second half of 2015, total inventory is expected to continue to increase throughout 2015. The Korea Rural Economic Institute is projecting that total swine inventory will peak in 2015 and then come down in 2017 as carcass price drops due to oversupply. The following table reflects the intention of farmers to gradually increase their herd size in 2015, using January 2014 as the base month.

Production, Supply and Demand Data Statistics:

Animal Numbers, Swine Korea, Republic of

2013

2014

2015

Market Year Begin: Jan 2013

Market Year Begin: Jan 2014

Market Year Begin: Jan 2015

USDA Official

New Post

USDA Official

New Post

USDA Official

New Post

Total Beginning Stocks

9,916

9,916

9,912

9,912

10,090

Sow Beginning Stocks

962

962

895

895

937

Production (Pig Crop)

16,953

16,953

15,500

16,812

17,600

Total Imports

2

2

2

2

2

Total Supply

26,871

26,871

25,414

26,726

27,692

Total Exports

0

0

0

0

0

Sow Slaughter

0

0

0

0

0

Other Slaughter

16,359

16,359

15,288

15,686

16,200

Total Slaughter

16,359

16,359

15,288

15,686

16,200

Loss

600

600

950

950

1,000

Ending Inventories

9,912

9,912

9,176

10,090

10,492

Total Distribution

26,871

26,871

25,414

26,726

27,692

Meat, Swine

Production:

As total swine inventory remained low due to the effect of sow reduction that took place during the second half of 2013, and increased PED outbreaks during the first half of 2014, total swine slaughter dropped by over 4 percent in 2014 over the previous year's level. As a result, pork production in 2014 dropped 52,000 MT over the 2013 level. Pork production is projected to increase during the second half of 2015 as the increased swine herd beginning from the second half of 2014 is brought out for slaughtering. The effect on total pork production from the FMD outbreak that began on December 3, 2014 is minimal so far as the total number of swine culled up to March 4, 2015 is 114,257 head. Considering that the average daily slaughter number is around 60,000 head and total swine inventory is over 10 million head, the culled number thus far is not expected to dampen total pork production in 2015. However, it still remains to be seen how long it will take to eradicate FMD.

Consumption:

Pork consumption in 2014 increased by over 6 percent despite low domestic production and high pork prices. This is due to the fact that increased import volume exceeded the amount of decrease in domestic production. Several reasons for increased pork consumption are: 1) Consumers have switched from beef to pork due to sluggish economic conditions. 2) Substitute demand in place of duck and poultry consumption as over 30 percent of the duck inventory was culled due to HPAI. 3) Popularity of television programs where families enjoy camping has spurred consumption of pork for BBQ purposes. 4) A policy allowing butcher shops to produce and sell processed meat products since October 30, 2013 has increased the demand for unpopular cuts such as picnic, ham and tenderloins. 5) According to a survey conducted by KREI in January 2015, over 30 percent of consumers are substituting pork in place of fish as they are afraid to consume fish due to the Fukushima nuclear plant accident in 2011.

As can be seen from the following consumption pattern, the amount of single rib bellies which traditionally has been the most favorite and most expensive cut is gradually dropping, whereas consumption of pork ribs, collar butts and loin are increasing. Such phenomena are due to promotional activities by the Korea Swine Association to increase the consumption of cuts other than pork belly, thereby increasing the overall profit return to producers.

Trade:

Pork imports increased in 2014 as domestic pork production dropped. As domestic pork production increases in 2015, imports are expected to drop slightly but still remain at a level higher than 2013 as domestic production will not have fully recovered to the 2013 level. Pork imports will continue to increase during the first four months of 2015, but is projected to drop after May 2015 when domestic production recovers. The United States is expected to increase its price competitiveness over EU suppliers as U.S. pork supply is expected to increase by 5.1 percent in 2015, and low feed costs will allow for higher carcass weight. The following table shows that U.S. pork prices will be more price competitive against EU pork price in 2015, largely due to lower FTA duties.

Category

Country

Unit

2014

2015

2019

2024

Exchange rate

Won / US dollar

1,053

1,095

1,035

1,038

Import price

U.S.A.

U.S. dollar / Kg.

3.08

3.03

3.03

3.07

EU

3.38

3.32

3.32

3.37

Other

2.55

2.50

2.50

2.54

Import duty

U.S.A.

Percent

8.0

4.0

0.0

0.0

EU

15.0

13.0

3.0

0.0

Other

25.0

25.0

25.0

25.0

Purchase price by wholesaler

U.S.A.

Won / Kg.

4,034

3,976

3,623

3,681

EU

4,697

4,699

4,067

4,035

Other

3,834

3,917

3,706

3,765

Source: KREI

Korea: Pork Imports Unit: Thousand dollars and Metric Tons

Country

Annual 2012

Annual 2013

Annual 2014

Value

Volume

Value

Volume

Value

Volume

United States

364944

122567

289880

103899

372590

111706

Canada

132222

58551

72839

39676

77144

34854

Chile

124600

37054

101751

30367

93293

25169

Austria

51088

13783

37999

10632

60639

16739

France

47866

12266

29796

7262

43853

10529

Netherlands

59806

14607

37133

9191

40118

10027

Spain

57448

26314

42267

18446

113247

38136

Belgium

38670

10232

28815

8213

37668

10562

Germany

133157

35742

112928

32338

217147

65512

Denmark

36662

14557

29394

11564

30735

11843

Hungary

15816

4840

8691

3216

18471

6089

Poland

47136

17183

28480

9818

18680

5826

Mexico

27661

8992

19651

7067

34356

8880

Others

19864

9062

15319

6908

35910

13011

Total

1156940

385750

854943

298597

1193851

368883

Source: KITA

Product Weight Equivalent basis

Includes: HS 020311, 020312, 020319 (fresh/chilled), HS 020321, 020322, 020329 (frozen), 021011, 021012,021019, 160241, 160242, and 160249 (processed pork products)

Production, Supply and Demand Data Statistics:

Meat, Swine Korea, Republic of

2013

2014

2015

Market Year Begin: Jan 2013

Market Year Begin: Jan 2014

Market Year Begin: Jan 2015

USDA Official

New Post

USDA Official

New Post

USDA Official

New Post

Slaughter (Reference)

16,359

16,359

15,288

15,686

16,200

Beginning Stocks

90

90

100

100

41

Production

1,252

1,252

1,170

1,200

1,240

Total Imports

388

388

425

480

460

Total Supply

1,730

1,730

1,695

1,780

1,741

Total Exports

2

2

3

2

2

Human Dom. Consumption

1,628

1,628

1,612

1,737

1,700

Other Use, Losses

0

0

0

0

0

Total Dom. Consumption

1,628

1,628

1,612

1,737

1,700

Ending Stocks

100

100

80

41

39

Total Distribution

1,730

1,730

1,695

1,780

1,741