If you feel like you're saying 'Han-don' instead of 'Han-don' every time you pick up pork belly, the reason is simple. It's because pork prices are continuing to rise!
Global pork production fluctuates depending on policy changes in major producing countries, breeding environments, and disease outbreaks. As of 2023, the total global pork production was approximately 116.02 million tons, a 0.2% decrease from the previous year. The country that produces the most pork is **China (56.75 million tons)**, followed by the European Union (EU, 21.25 million tons), the United States (12.68 million tons), and Brazil (4.5 million tons). As of 2022, Korea produced approximately 1.42 million tons, ranking 14th in the world.
Why did pork prices rise so much? There are five main reasons why a plate of pork belly is becoming more and more expensive.
1. Soaring feed prices
Since the Russian-Ukrainian War, the cost of raising pigs has increased as international grain prices have skyrocketed. Feed prices account for more than half of the cost of raising pigs, and when grain prices rise, pork prices also rise.
2. Spread of ASF (African swine fever)
ASF is a fatal infectious disease for pigs, and once it occurs, large-scale culling is inevitable. Since a large-scale outbreak in China in 2018, it has spread throughout Asia and Europe, drastically reducing the supply of pork. In Korea, ASF has occurred several times since 2019, which has also caused pork prices to rise.
3. Foot-and-mouth disease outbreak
Another virus that affects pork prices is foot-and-mouth disease. It is a highly contagious disease that occurs in animals with two hooves, and if infected, large-scale culling occurs. In Korea, a large-scale foot-and-mouth disease outbreak occurred in 2010-2011, resulting in the culling of approximately 3.4 million pigs, and the price of pork skyrocketed. Recently, foot-and-mouth disease has occurred in some regions, and supply instability continues.
4. Increased consumption & exchange rate fluctuations
While the number of consumers looking for pork belly and pork neck is increasing, the supply of pork is unstable. The price of imported pork is also fluctuating due to the rise in the exchange rate, increasing the price burden for both domestic and imported pork.
5. Increased labor and logistics costs
Increased logistics costs and labor costs are also factors driving up pork prices. In particular, additional costs are incurred in the distribution process of pork due to the logistics crisis, further increasing consumer prices.
Why is there such a large price difference between wholesale and retail?
Pork prices increase not only due to the cost of raising the pig, but also during the distribution process.
Wholesale prices fluctuate rapidly depending on supply and demand, but retail prices are formed at higher prices as they include distribution costs and margins. For example, as of 2024, the wholesale price of domestic pork belly is around 18,000 won per kg, but the retail price sold at marts and restaurants is set at over 27,000 won per kg. This is because additional costs are incurred during the slaughter, distribution, and sales processes.
What will pork prices be like in the future?
Pork prices are likely to be affected by strengthened environmental regulations, increased feed and labor costs, and disease risks.
✔ Possibility of ASF and foot-and-mouth disease outbreaks – The biggest variables that make pork supply unstable!
✔ Difficulty in increasing global production – Demand continues to increase, but supply is not increasing.
✔ Changes in consumer demand & import price fluctuations – Price fluctuations are expected depending on domestic consumption trends and global market conditions.
Now, there may come a time when it is difficult to enjoy even a plate of pork belly to your heart’s content.
We should carefully watch pork price changes in the future.
Sources
FAO (Food and Agriculture Organization of the United Nations), "World Meat Market Review 2023"
USDA (United States Department of Agriculture), "Livestock and Poultry: World Markets and Trade, 2023"
Ministry of Agriculture, Food and Rural Affairs, "Livestock Industry Trends and Outlook 2024"
Korea Rural Economic Institute (KREI), "Livestock Observation 2024"
Korea Pork Producers Association, "Domestic Pork Price and Market Analysis"
Statistics Korea, "Consumer Price Trends 2024"