Korea's major chicken processors including Harim, Dongwoo, Charmfre, and Orpum have set out to adjust the supply volume in the form of buying up live chickens from farmers and stocking up in their refrigeration storage. That's because the demand for chicken has not recovered since the bout of bird flu early this year while the supply is piling up. In the worst case scenario, the chicken processors are willing to discard to surplus to keep the price going down further.
The chicken processing firms said on October 19 that they would start stockpiling the frozen chicken following the recent decision of the Chicken Marketing Board. The board consisting of the representatives of the Ministry of Agriculture, Food, and Rural Affairs, the Korea Poultry Association, the Korea Chicken Council, meat processors, and consumer advocacy groups has decided to cut back the chicken supply by 3.0-3.5 million this year.
According to the Korea Institute for Animal Product Quality Evaluation, the per-kilogram farm-level chicken price last month was 1,238 won. This is far short of the average production cost estimated by the poultry association of 1,600 won. The farm price of chicken has fallen 27 percent for the past one year. As for retail price, it declined more than 17 percent to 5,259 won from 6,393 won during the same period.
The main reason for chicken price's free fall was the outbreak of bird flu early this year. Although the authorities took the timely measure of killing 12 million chickens in the southwest, the demand has not yet returned to the pre-epidemic level.
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