How does pork price break the cycle cycle?

From the perspective of supply and demand, the pork supply in China increased in 2012. The pork production was 53.35 million tons, an increase of 5.6% over the previous year. The number of live pigs was 472.92 million, an increase of 1.6% over the previous year; the hog production was 69.628 million, an increase over the previous year. 5.2%.

“In general, pig production has increased by more than 3% year-on-year, and hog prices may reflect the changes in supply and demand and have fallen,” said Li Guoxiang.

As a result, pork prices in 2012 fell by 4.1% from the previous year after a sharp increase in 2011. Before the Spring Festival this year, the price of live pigs rose seasonally. However, in order to stabilize prices, some regions have put in reserve meat and triggered a chain effect. As a result, the price of meat has stabilized and the farmers have been panicked. After the Chinese New Year holiday, the pork entered the off-season, the pork price fell faster than expected, and the farmers’ panic intensified and there was a concentrated sell-off. Coupled with the recent floating pig incident in the Huangpu River, consumers gradually reduced pork consumption and also affected pork prices.

The "roller coaster" for pork prices is called "periodic fluctuations in live pig production" in the industry, namely the "pigs cycle." “The growth of live pigs has a certain periodicity. Some farmers tend to use the current market price as a standard to anticipate future returns, but the plan cannot catch up with the rhythm of market changes, and to a certain extent has contributed to the formation of 'pig cycle'.” Li Guoxiang explain.

What factors have affected pork prices? Li Guoxiang said that in addition to the relationship between supply and demand, the increase in the price of feedstuffs for pigs and the price of pork tend to aggravate the periodic and seasonal fluctuations in the price of meat. Adjusting production based on past price fluctuations is an adaptive expectation. The stronger the adaptive expectations, the more likely the cyclical fluctuations and seasonal fluctuations are, and the larger the fluctuations may be. The market price of live pigs and pork began to fall after the Spring Festival in 2012, which is an inevitable response to the expected adaptability of pig farmers.

Li Guoxiang told reporters that the operating conditions of the live pig market are sometimes related to the macroeconomic situation and macroeconomic control policies. Although macroeconomic policies cannot change the trend of hog prices, they may also affect the extent of price fluctuations. For example, the relaxation of monetary policy and improvement in real income of residents can help stimulate pork consumption and promote pork price stability.

Enhance the pertinence and effectiveness of the control policy, and use the pig industrial chain as a basis to “fix the cure”

“The high price hurts the people and the price hurts the farmers.” How can the pork price break the “porcine cycle” cycle?

Li Guoxiang introduced that since 2007, the state has introduced a series of live pig support policies and market control policies, and in particular policies that prevent excessive fluctuations in live pig prices have played a role. He believes that the focus of the work in the future should be to continuously improve the existing regulatory system, increase the pertinence and effectiveness of the policy, and in particular gradually increase the adjustment of financial instruments, timely launching pig insurance, preferential credit and other policies to help farmers spend Difficulties, enhance their ability to withstand the risk of cyclical fluctuations.

To maintain the stability of pork prices, the key is to protect the stable development of the industry. From the intrinsic link of the pig industry, pig breeding and breeding, circulation, slaughter, and pork consumption restrict each other and promote each other. Problems in any link can affect the entire industry. To promote the healthy development of the pig industry, it is necessary to use the industrial chain of pigs as a basis to “fix the root cause” through industrial integration.

"The recent sharp fluctuations in the live pig market price may be related to the occurrence of heavier diseases." Li Guoxiang analyzed that disease control and aquaculture environment is the biggest gap between China and developed countries, and it is also a major factor restricting the improvement of pig production in China. . In the long run, the government should actively promote the scale and industrialization of hog farming, increase the construction of large-scale breeding farms and breeding communities, and provide preferential policies and funds for hog-scale aquaculture to stabilize the main pig production.

Drawing on foreign experience, Li Guoxiang believes that China should expedite the establishment of cooperative organizations for hog farming, increase the organization and planning of hog farming, reduce the price fluctuations brought about by blind production, and increase the right to speak on the farming chain in the industry chain. At the same time, large-scale slaughter and processing enterprises are encouraged to carry out integrated operations such as breeding, slaughtering, processing, distribution, and sales, and slaughtering and breeding will be unified to form a joint force to enhance the anti-risk capabilities of the industry.