Hanwoo Beef Goes Premium
Prime Cut Fetches $100 Per Pound
By Kim Hyun-cheol
Staff Reporter
Sales are falling and prices dropping for hanwoo, or homegrown cattle beef, but cheaper imported beef could drive it out of the market. As a means of last resort, some domestic cattle farmers are trying to make their products premium.
E-Mart said Tuesday that its beef sales dropped 24 percent last month from a year earlier. The fall began in May, when oil prices began to skyrocket and a huge public outcry erupted over the resumption of U.S. beef imports, the nation's biggest retailer said.
Prices of hanwoo are accordingly slumping. The price of one 600-kilogram cow fell to 3.4 million won ($3,276), down nearly 30 percent from January.
Ultra-pricey beef is also going on sale. Shinsegae Department Store has released high-grade organic hanwoo, which costs 20,000 won per 100 grams. The price is 40 percent higher than the usual premium hanwoo beef and ten times that of imported beef
Shinsegae said this daring new product will promote beef consumption, albeit at a scary price, by meeting the fastidious standards of consumers, as they become more sensitive to safety issues.
"We have prepared special cattle for three years. All cattle were raised under the best circumstances ― fed organic fodder only and no antibiotics and other chemical supplements injected," the department store said.
The strategy is in line with livestock growers. In spite of struggling sales, several high-end hanwoo brands are enjoying surprising success in a positive sign for domestic ranchers.
There were only four premium brands until 2006, but now 15 are on the market, keeping nearly 320,000 cattle as of June.
Premium brands have the huge advantage of stable prices. One 600-kilogram cow sells for 4.1 billion won in South Chungcheong Province, but that of Tobawoo, its premium brand branch, is 1.7 million won more expensive, according to the National Agricultural Cooperative Federation.
Sales of hanwoo from Hoengseong County, Gangwon Province, last month jumped to 23.4 billion won ($23 million), up 38 percent year-on-year. The county is expecting the specialty will hit a record high this year as the Chuseok holidays and a hanwoo festival are coming.
Hoengseong, which raises some 39,000 cattle, is launching a retailer of its own specializing in beef.
Other provincial governments are also promoting joint beef brands.
South Gyeongsang Province introduced its hanwoo brand, Hanwoojiye, in June with more than 1,100 cattle breeders participating. After 1.5 months, the brand is considered to have settled in the market.
Quality-for-cost performance is Hanwoojiye's sharpest edge. The beef is up to 20 percent cheaper than those of other premium producers, as the province shortened its distribution stages to cut overall margins.
The trademark, however, also leaves something to be desired in securing wider recognition, as most supplies are confined to the province.
"It's our priority to foster recognition of the brand first in our territory," said Han Dong-seok, a staff at Hanwoojiye's headquarters. "Once that's done, we plan to further spread our market to Seoul and vicinity through big retailers and department stores."
The government will also help domestic beef brands.
Agriculture Minister Chang Tae-pyong said last week that his ministry will aid in the production and import of quality hanwoo beef.
"I've ordered the forming of a task force team for agricultural resource prices first," he said while visiting a ranch in Anseong, Gyeonggi Province. "The ministry will offer all-out support for competent cattle breeders so they can produce world-class beef products."