Cattle farmers in existential crisis
By Kim Tong-hyung
To get across the dire state of Korean commercial farmers, look no further than the remains of cattle left to starve to death at a North Jeolla Province farm.
And if the gruesome discovery somehow isn’t enough, the hundreds of livestock breeders who were screaming obscenities at police Thursday for blocking roads around Seoul and derailing their plans to release truckloads of animals near Cheong Wa Dae are more than willing to hammer the message home.
While it could be said that the crisis facing cattle farmers today was predictable and perhaps inevitable, that doesn’t make their experience feel any less harsh.
The sharp rise in prices of domestic beef in past years, particularly those of ``hanwoo,’’ or prime-grade Korean beef, has resulted in a staggering oversupply, which has now triggered a dramatic plunge in the values of cows, bulls and calves, live or butchered.
The foreseeable future is grim for cattle farmers and the long-term outlook even grimmer. With Korea executing free trade pacts with the United States and seeking similar deals with other major meat exporters Canada and Australia, it’s plausible that raising cattle is over as a business model for Korean farming communities.
Some observers, such as Hanshin University’s Lee Hae-young, could see a day when Korea’s once lucrative hanwoo industry ceases to exist in meaningful form. The livestock breeder in Sunchang who allowed his cows and calves to die of starvation, saying he could no longer afford hay and other feed, could prove to be the first of many farmers simply giving up in despair.
``The government has been lax about introducing back-up measures to protect local farmers who will be taking a hit from the Korea-U.S. FTA. It wasn’t only until recently when the media started highlighting our peril that government authorities budged and came up with ideas to help the hanwoo industry, like providing more of the meat to soldiers,’’ said an official from an association of cattle farmers in South Chungcheong Province.
He was among the several hundred cattle farmers around the country who had pledged to rally in front of the presidential office in Seoul, but failed to penetrate the watertight police blockade.
``The core of the problem lies with the distorted retail system, as consumers are paying the same, expensive price for beef even when the cost at point of production dramatically falls. We need more financial support for animal feed and must be allowed to supply our meat to schools too,’’ he said.
As of Dec. 1 last year, there were 2.95 million cows, bulls and calves raised at farms around the nation, Statistics Korea said Thursday, significantly above the level of 2.5 million animals the government sees as appropriate.
A full-grown, 600-kilogram hanwoo cow was trading at an average of 4.44 million won (about $3,850) at livestock markets earlier this week. This was 30 percent less than the 6.35 million won it would have got at the end of 2010, before the country was hit with a devastating foot-and-mouth outbreak, according to the Ministry for Food, Agricultural, Forestry and Fisheries.
The price of a hanwoo calf was 1.29 million won, down from 2.8 million won in 2010.
Full-grown ``yukwoo,’’ or lower-grade cattle, are fetching just around 2 million won per head. A yukwoo calf gets just above 10,000 won, similar to the cost of a dish of belly pork (samgyeopsal) at a Seoul restaurant.
The sharp decline in cattle prices has been coupled by a rocketing increase in the costs of grain, hay and other animal feed, which has farmers lamenting that every newborn calf is a business loss.
Food lovers here have long complained about the notoriously expensive local beef, so one might assume that farmers’ losses from skidding prices of cattle could be offset by a jump in consumption. But even when cows can starve in mangers, Korea’s complicated retail jungle has assured that the price diners pay for their favorite cuts remains the same.
Visit any restaurant in downtown Seoul and the prices for 150 grams of hanwoo will be frequently be above 30,000 won.
``Well, yes the prices of cattle has come down, but we are paying pretty much the same for our meat supplies as two or three years ago. The cost for cattle per head may have dropped, but the prices for premium cuts like tenderloin and sirloin are pretty much at the same level,’’ said a restaurant owner in Hyehwa-dong.
``Besides, we have to serve the meat with lettuce and other vegetables, which are a lot more expensive than they were two years ago.’’
Policymakers are scrambling for measures to massage the egos of cattle farmers and restore stability in beef prices. Their ideas include providing farmers more incentives to butcher their older cows to rebalance supply and demand, and increasing the supplies of hanwoo and other domestic meat to soldiers.
Critics are skeptical on whether the measures will work as prescribed. It’s hard to remember the last time the government successfully motivated cattle farmers to reduce their stock, if there ever was a first. And allowing Korean farmers to dominate meat supplies to Army bases isn’t going to fly well once the free trade agreement (FTA) with the U.S. kicks into effect.