International grain prices are rising due to the blockade of the Strait of Hormuz amid the conflict between the U.S. and Iran. This increase is expected to drive up domestic feed prices, raising concerns that livestock prices may follow suit. Additionally, the prices of cooking oils and other fats are also climbing, making dining out less affordable.
According to relevant authorities on May 10, the United Nations Food and Agriculture Organization (FAO) reported that the global food price index rose by 1.6% last month, reaching 130.7. This index compares current prices to the average from 2014 to 2016, and after five consecutive months of decline until January, it has now increased for three straight months since rebounding in February.
Specifically, the international grain price index led the increase, rising 0.8% to 111.3. Wheat prices were affected by drought in some regions of the U.S., contributing to a 0.8% increase in the wheat price index. The blockade of the Strait of Hormuz has also led to higher fertilizer prices, prompting farmers to reduce wheat cultivation, which further drives up prices.
The corn price index rose 0.7% compared to the previous month due to supply shortages in Brazil and drought conditions in the U.S. The rice price index also increased by 1.9% over the month, influenced by soaring crude oil and petroleum derivative prices, which raised production and distribution costs.
The rise in international grain prices is expected to exert pressure on domestic feed prices over time, as more than 95% of the grains used in feed for livestock farms are imported. Additionally, the won-dollar exchange rate has significantly increased compared to a year ago (averaging 1,394 won in May 2025), further raising import costs.
The feed industry is also reaching its limits. A representative from the feed sector stated, "With the exchange rate rising and shipping costs increasing due to the Middle East conflict, grain prices are also climbing. While we are trying to hold off on price increases due to demands from the agricultural sector, we cannot allow losses to accumulate indefinitely, so we are considering various alternatives."
When feed prices rise, livestock prices are also affected, as feed costs constitute a significant portion of production expenses. It is reported that about 40% of the production costs for Hanwoo, a popular breed among farmers, are attributed to feed. Currently, both domestic farmers and the feed industry anticipate a high likelihood of price increases in the second half of the year.
As a result, concerns are growing that already soaring livestock prices may become even more unstable. According to the Korea Institute of Animal Products Quality Evaluation, the price of grade 1 beef sirloin was 9,980 won per 100 grams, an 11.1% increase compared to a year ago. The price of pork belly also rose to 2,742 won per 100 grams, up 9.6% from the previous year. With the added pressure of rising feed costs, there is a strong possibility that this upward price trend will continue.
Imported beef prices are also rising, putting pressure on consumer prices. As of the previous day, the price of U.S. beef short ribs (chilled) and chuck eye roll (chilled) was 4,724 won and 4,123 won per 100 grams, respectively, marking increases of 13.7% and 18.0% compared to a year ago.
The prices of cooking oils and other fats, which impact overall dining costs, are also concerning. According to the FAO, the price index for oils and fats rose by 5.9% last month, reaching 193.9. The international palm oil price, a key ingredient for cooking oil, has continued to rise for five consecutive months due to increased demand for biofuels.
A representative from the Ministry of Agriculture, Food and Rural Affairs stated, "Given the ongoing uncertainties in international raw material prices, we will strengthen monitoring of supply and demand conditions for various items and will make every effort to manage the supply of agricultural and livestock products using available means."
* This article has been translated by AI.
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