South Korea spends 121.2 billion won to import eggs and hold down prices

The South Korean government will spend 121.2 billion won ($78.4 million) to import about 231.39 million fresh eggs through August in an effort to stabilize stubbornly high egg prices.

According to the Ministry of Agriculture, Food and Rural Affairs, the government will spend 21.5 billion won from January through early July to import about 31.39 million fresh eggs from the United States, Thailand and Brazil, then commit an additional 99.7 billion won to bring in about 200 million more eggs from July through August. The outlays mean more than 120 billion won in public funds will be spent in just eight months this year to keep household food costs in check.

The cost structure for imported fresh eggs defies common assumptions. The price is not simply determined by the overseas market rate. Additional costs arise from cold-chain logistics to preserve freshness, transportation, customs clearance and quarantine, repackaging, and domestic distribution.

Airfreight is by far the largest single cost. When eggs must be rushed into the domestic market to stabilize prices, they are flown in — a mode of transport that can cost several times more than sea freight.

Based on information from the laying-hen industry and government sources, the total landed cost of imported eggs — including airfreight and repackaging — can reach as high as 20,000 won per 30-egg tray.

To bring the retail price down, the government subsidizes part of the transport and repackaging costs with public funds.

Specifically, it covers the gap between the import cost and the selling price, allowing 30-egg trays of imported eggs to be sold at 5,000 to 6,000 won — well below cost.

The laying-hen industry argues that the current spike in egg prices stems from a regulation requiring that floor space per adult hen be expanded from 0.05 square meters to 0.075 square meters.

The industry says the rule, which takes full effect in September 2027, will cut domestic flock sizes by more than 33 percent, creating a daily shortfall of at least 12 million eggs against daily consumption of about 50 million.

The industry also contends that today's elevated egg prices already reflect the advance impact of facility upgrades and flock reductions prompted by the regulation's announcement. It points to the roughly 19 months it takes from the time laying hens are introduced to when they begin producing as evidence that the market has priced in the coming supply squeeze.

The Korea Laying Hen Farmers Association criticized the situation as contradictory. "Government regulation has caused domestic output to fall and prices to rise, and now the resulting shortage is being filled with foreign eggs produced in conditions far more cramped than domestic standards require," it said.

The Ministry of Agriculture, Food and Rural Affairs pushed back, saying the space requirement is a necessary measure introduced in 2018 to improve egg hygiene and shift toward animal-welfare farming, and that many farms have already recognized the need for the policy and completed the transition.

To help farms upgrade their facilities, the government has provided about 357.4 billion won in loans and interest-rate subsidies from 2024 through this year to ease the transition.

The ministry also said facility costs account for only a small share of egg production expenses.

According to the Ministry of Statistics, feed costs make up the largest share of egg production expenses at 56.9 percent, followed by chick costs at 20.3 percent, labor at 4.4 percent and facility costs at just 1.5 percent.