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Why Does Cattle Price Fluctuate ? : Structural Characteristics and Simulation Works

The prices of Korea's agricultural and livestock products have fluctuated considerably over the past few decades, surging and plummeting periodically. Typical Korean agricultural products whose prices fluctuate significantly include radishes, cabbages, onions, Korean beef, and pork. Of these, Korean cattle price per head has in recent times fluctuated to a greater extent than any other product. The Korean cattle price per head (based on a large 600kg large cow) fell from KRW 6.21 Due to this halving of cattle prices and surging feed prices, Korean cattle farmers and markets came close to collapsing, and the government had to devise effective countermeasures. Livestock farmers and the Korean Cattle Association, as well as political circles, all urged the stabilization of cattle prices, demanding that appropriate policy measures be put in place. However, all these groups and the government itself have recognized different causes of and responsibilities for the plunge in Korean cattle prices. This study clearly defines the interaction of factors which causes Korean cattle price to fluctuate, because fluctuations have occurred periodically over the past thirty years. Such severe price changes are fundamentally influenced by supply and demand factors as functions of time. In other words, there is an interaction involving various factors-which influence the supply of and demand for Korean cattle-such as the size of the Korean cattle population, the volume of beef imports, beef prices, the amount of beef consumption, feed