South Korea’s outbreak of foot-and-mouth disease (FMD) could garner increased demand for U.S. pork products but less demand for U.S. corn into next year, according to a report published this week by the U.S. Department of Agriculture’s Foreign Agricultural Service.
To date South Korea’s worst FMD outbreak in history has reportedly resulted in the depopulation of about 30% of the nearly 10 million swine and 5% of the more than three million cattle as of Feb. 7.
The outbreak began in November, and despite government containment efforts, ballooned to 146 cases throughout most of the country in two months. The cost of the outbreak has already surpassed $1.8 billion, according to South Korea’s Ministry for Food, Agriculture, Forestry and Fisheries.
South Korea traditionally supplies 70% of pork to a nation that eats more pork than any other protein source (more than 42 lb./capita/year). The shortage of pork has caused pork prices to rise. Faced with higher prices, consumers may turn to other protein sources such as poultry or seafood, but also more imported pork and beef.
Improving economic conditions had forecasts for pork imports to rise by 5%. But the FMD situation and changing consumption patterns could bolster imports by 30-40%. To help curb rising prices, the government reduced import duties to zero (from 25% until June) on 50,000 tons of frozen pork cuts and 10,000 tons of frozen pork bellies.
South Korea has been one of the world’s largest corn importers at about nine million tons annually. The reported 30% drop in the swine herd has already resulted in a million-ton reduction in this year’s estimate of corn imports.
It’s expected to take some time for the Korean pork industry to fully recover from the FMD outbreak. Culling animals reduced the domestic meat supply, but it also eroded future production potential for some time, as farms infected with FMD must remain vacant for about two months following an outbreak. Large imports of swine breeding stock will be needed to replenish depopulated sow herds, dampening demand for corn into next year. U.S. pork exports will likely benefit during the time it takes for South Korea to gradually rebuild its swine industry.