Research Reports
A Study on Beef Consumption Changes in Korea after the outbreak of BSE in the U.S.
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AuthorSong, Jooho
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Publication Date2004.10.01
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Original
After the outbreak of BSE (Bovine Spongiform Encephalopathy) in the United States inDecember 2003, domestic beef consumption decreased dramatically for the first half of 2004 even though BSE cases in Korean cattle have never been found. The purpose of this study is to analyze the recent consumption patterns and consumer's perception changes in the Korean beef market and thus to analyze whether there was any structural changes in beef consumption patterns in Korea.
In 2002, Korea imported 292 thousand tons of beef, of which 187 thousand tons (64%) were from the U.S. The domestic beef production was 147 thousand tons. Thus, 43% of beef consumed in Korea was from the U.S. Therefore, even a single outbreak of BSE in the U.S. provoked serious food safety concerns amongst Korean consumers. The frequent BSE outbreaks in the Europe and Japan have had little impact on Korean consumers because Korea did not import beef from those countries.
Consumers reduced beef consumption drastically regardless of countries of origin. In January 2004, domestic beef consumption decreased by 37.2%. HanWoo (Korean Traditional cattle) price dropped 28% during the first three months. Pork and Chicken consumption increased as substitutes for beef. The sluggish economic situation and recent well-being trend in Korea were also thought to contribute to the reduction in beef consumption.
The impact of BSE and health-conscious eating habits on beef consumption was not easy to estimate numerically because it is still on going. These were called psychological impacts. Overall effects on beef consumption consisted of economic impacts (which can be estimated using price and income elasticities) and a psychological impact. The psychological impact was calculated as remainder by subtracting economic impacts from the total impacts. The result shows that the drastic reduction in beef consumption in first half of 2004 was in large part due to the BSE outbreak in the U.S., although its impact was peak in the first three months in 2004 and decreased thereafter. A survey on consumers was conducted to complement the statistical data analysis. Many consumers answered that they bought pork or seafood instead of beef primarily because of the BSE concern. For the question of, "best government policy measure to increase beef consumption", consumers chose in the order of food safety, traceability, lower price, and the labeling of country of origin in the restaurant.
The analysis concluded that there was not enough evidence for structural changes in the Korean domestic beef market. The market for domestic beef will likely recover in the nearfuture but would maintain a slightly lower level in the next year compared to average consumption levels.
Researchers: Song Joo-Ho (jhsong@krei.re.kr)
Shin Seung-Youll
Kim Chul-Min
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