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South Korea’s poultry sector recovers from bird flu

Chicken production and consumption in Korea are expected to increase in 2021 and 2022. Meanwhile, the country’s broiler inventory recovers from the avian influenza-related depopulation, and exports are expected to increase by 57%.
The Covid-19 vaccination rate in Korea is increasing, and chicken demand is rising with the resumption of more normal economic activity, including those in the eventing and hospitality sectors. Photo: Sava Bobov
The Covid-19 vaccination rate in Korea is increasing, and chicken demand is rising with the resumption of more normal economic activity, including those in the eventing and hospitality sectors. Photo: Sava Bobov

The latest Korean highly pathogenic avian influenza (HPAI) outbreak began in November 2020, spread widely, and led to a massive depopulation with the culling of 26 million chickens (15% of the chicken population). HPAI was detected on 109 commercial poultry (including duck) farms, and there were 234 wild bird cases. As a result, in 2021, chicken production in Korea is expected to decrease by 2.8% to 935,000 mt. The most recent case was reported on in April 2021, although the outbreak currently appears to be under control.

Egg shortage and price hike

The massive depopulation of layers (about 16.7 million birds, or 26% of inventory) caused a shortage of egg supplies in the Korean food market in the first 7 months of 2021. Egg retail prices increased by 45% from the 2020, despite the extra supply created by a temporary duty-free tariff rate quota for 86,000 mt of imported fresh eggs and processed egg products. Korea imported 14,307 mt of fresh shell eggs during the period (January to July 2021), with the US covering most this volume (13,377 mt), followed by Thailand (885 mt) and Spain (44 mt).

Strong farmgate prices and vaccination rates

In 2022, chicken production in Korea is projected to increase by 3.2% to 965,000 mt, while consumption is projected to increase by 2.8% to 1.1 million mt. The country reports a 6.3% increase in broiler parent stock in the first 6 months of 2021, and strong farmgate chicken prices throughout 2021. Furthermore, the Covid-19 vaccination rate is increasing, and chicken demand is rising with the resumption of more normal economic activity, including those in the eventing and hospitality sectors. Also encouraging chicken production is continued competition between vertically integrated chicken companies, increasing market share by building new slaughtering facilities.

Chicken inventory in Korea

Lower chicken prices in 2020 coupled with the HPAI outbreak in 2021/2022 resulted in the country’s chicken inventory (including broilers, layers, and PS chickens) in the second quarter of 2021 dropping by 5.4% to 186 million:
- Broilers: 59% of inventory (109.7 million)
- Layers: 35.9% of inventory (65.9 million)
- Parent stock: of inventory 5.9% (11 million)

Chicken prices

Average retail prices for domestic fresh chicken meat (legs, breast, and wings) increased by 20% during the first half of 2021 due mainly to reduced chicken supply caused by the HPAI outbreak. Prices are expected to stabilise during the second half of 2021 as chicken supply recovers. Imported frozen chicken leg prices (mostly imported from Brazil), were about 33% less expensive than domestic fresh chicken cuts during the first half of 2021.

Brazil and Thailand top chicken suppliers

Brazil was the top chicken supplier in the Korean market in 2020 (67.4% market share at 114,852 mt), followed by Thailand (19.9% market share at 33,811 mt). Korea’s chicken imports are projected to increase by nearly 3% to 185,000 mt in 2022 due to moderately higher consumer demand. Korea imports mainly frozen whole chicken legs (deboned) from Brazil, although chicken wing imports have also increased in recent years as more chicken wing menus are available through restaurant delivery services.

Korean exports up 57%

Korea’s chicken exports are projected to increase by 57% to around 55,000 mt in 2022. Chicken meat exports to Vietnam are expected to recover, while steady demand for Korean raw chicken in Hong Kong is anticipated due to the popularity of Korean food culture there.

The information in this article was extracted from a USDA GAINS report.