Journal of Rural Development
Development of a Domestic Pork Supply and Demand Forecasting Model Using a Simultaneous Equation Model
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AuthorOh, Byeongmu
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Publication Date2025.09.21
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Original
The Korean pork industry has grown amid increasing consumption and structural changes in its production base. However, limited supply adjustment capacity and the growth of imported meat have resulted in persistent supply-demand imbalances and price volatility. This study aims to develop a simultaneous equation model that incorporates the biological production structure of pigs and utilizes pig traceability data to enable monthly supply-demand forecasting and scenario analysis. The model comprised supply and demand components. The supply sector reflects the time-lag structure between production stages, whereas the demand sector estimates consumer responses based on price and income variables. The analysis revealed significant interdependencies among production stages, as well as statistically significant demand elasticities with respect to price and income, and substitution effects with imported pork. The model demonstrated strong forecasting performance, with in-sample mean absolute percentage errors (MAPE) below 3.1% across all variables and stable out-of-sample errors. The model developed in this study is expected to serve as a key tool for forecasting domestic pork supply and demand and for supporting policy decision-making.
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