Last year US beef imports stood at 168,000 tons, accounting for 48.9 percent of total beef imports. US beef ranked first among import beef in 14 years since 2003. This means that US beef beat market leader Australian beef (150,000 tons, 43.5 percent) which has ramped up its power on the coattail of the Mad Cow Disease scandal in 2008.
According to “An Agricultural Outlook for 2018” by the Korean Rural Economic Institute on February 15, Korea’s beef self-sufficiency rate reached 41.0 percent last year. This means that import beef sell far more than Korean beef. The rate is steadily declining after peaking in 2013 (50.1 percent). The per-capita consumption of beef increased from 10.3 kilograms in 2013 to 11.5 kilograms in 2017 but the consumption of Korean beef slid from 260 kilograms to 239 kilograms during the same period. By contrast, the consumption of import beef leaped up from 259 kilograms to 344 kilograms. A survey of 639 consumers by the institute showed that consumers who have purchased American beef grew from 51.6 percent in 2013 to 65.9 percent last year.
Although the number of consumers choosing cheap substitutes was on the rise, price gaps between import beef and Korean beef widened. Last year, the price of first-grade Korean cow ribs was 5,107 won per 100g, up 1.9 percent from a year ago. Prices of frozen US ribs also hiked nearly as high as those of Korean beef but their price was only 2,787 won per 100g, about half those of Korean cow ribs.
It is forecast that import beef will enter the Korean market more aggressively in the future. According to the US Department of Agriculture, US beef exports this year are expected to swell 2.7 percent to 1.32 million tons. It is also forecast that Australia's beef production conditions will also improve, enabling Australia to export 1.43 million tons of beef, up 5.2 percent from 2017. In addition, the institute’s analysis said that a drop in the exchange rate and import prices would promote an increase in beef imports. "The tariff on US beef will shrink to 18.6 percent (currently 21.3 percent) starting in 2019 and then will be completely abolished in 2026 according to the Korea-US Free Trade Agreement (FTA)," said a representative of the Korean Rural Economic Institute.