The purpose of this study is to establish the middle- and long-term strategies which strengthen the competitiveness of the domestic pork to prepare for increase in pork import. This study analyzes the impacts of the out-break of foot-and-mouth disease and pork-related tariff exemption and forecasts supply and demand in the pork market changes caused by FTA.
In spite of the increase in imported pork quantity due to tariff exemption, Korea pork industry shows a rapid recovery but the speed of recovery is expected to be slowed down after hog population reaches the 9million in 2013. It is forecasted to be 700,000~800,000 ton for domestic pork production and 300,000~350,000 ton for imported pork in the long-run by KREI KASMO. Therefore, the market share of imported pork will be 30~35% in 2021.
Although foot-and-mouth disease broke last winter, pork consumption was not decreased and pork demand is expected to be continuously increased. Consumers consider that the origin is an important factor when they buy pork and they believe that domestic pork is fresher, safer, and more delicious than imported pork.
The results of the survey show that comsumer is willing to pay 600~900 won/100g more for domestic pork belly than for imported pork belly. However, demand for high quality imported pork is forecasted to be increased in the future, as a result, the market share of imported pork will be 30~40% in 2021.
Vertical integration leaded by agricultural cooperatives should be established to get competitiveness in the Korea pork industry. The vertical integration can improve price competitiveness and quality of domestic pork by increasing the productivity and decreasing marketing cost. Denmark pork industry had vertically integrated during 80's~90's, so that they could accomplish a global competitiveness by farm scale improvement and stabilization of the farm business.
Differentiation strategies in marketing are needed to secure market share of domestic pork. Korean consumers consider that domestic pork is fresher, safer, and more delicious than imported pork, so the differentiation strategies should be focused on this consumers' conception. As the differentiation strategies, environmental reform in farm, control of diseases, invigoration of distribution with boxed meat, sanitary supervision, building-up brand power, enforcement of country of origin labelling, history traceability, grade labelling, and expansion of specialized meat store could be recommended tasks to differentiate domestic port from imported pork.
Besides the differentiation strategy, cost cutting strategies are needed to strengthen competitiveness by improving productivity in the Korea hog industry. Modernization of breeding and processing facilities, separation of fatting and breeding farms, stabilization of feed price, horizontal integration in farm level and slaughter/processing level should be fulfilled to improve productivity for the Korea hog industry.


Researchers: In-bae Ji, Min-kook Jeong, Hyun-joong Kim, Woo-jin Song
Research period: 2011. 8 ~ 2011. 11
E-mail address: jiinbae@krei.re.kr