Reasons for Price Increases in Pork: Industry Dilemma in the Eyes of a Big Pig Farmer

Dongfangwang July 18 news: According to the "Labor" report, with the release of the CPI in June, pork prices were once again thrown into the turbulence of the market, the year-on-year increase of 57.1%, the contribution to the total price level in June was 21.4% It can be said that the rapid rise in pork prices directly "arches" higher CPI.

Recently, the reporter approached the lowest level of the industrial chain—aquaculture farmers in the suburbs of Shanghai—to understand the underlying causes of the soaring price of pork. In their view, inflation is not the key reason for the cost-promoting links in the outside world. Successive epidemics and ups and downs are the direct cause of the “hog arch”. As a result, the price cuts for one pig also need to be redrawn.

The serious illness of Lao Yan, a big pig farmer, led to slaughter of 30% in July. Yan Gang was standing outside his own pig farm and sweated. He watched the thousands of pigs running around in the bar and looked on his face. There was no glimmer of joy. Even though his cell phone kept ringing, people were constantly buying pigs, and the price had already exceeded 10 yuan per catty. Such a price could be said to be astronomical in recent years.

Yan Gang, the suburb has a large number of pigs with nearly 30 years of experience, and these days are a little tired, not because of feed price increases. He has his own mind.

"I hope pigs don't get sick, or they'll be slaughtered soon, and the damage will be big." He smoked a cigarette and said slowly. "I don't know what happened this year. The epidemic continued. In the first half of the year, the amount of slaughter in the farms was less than 20% or 30% over the same period last year. Of course there are other reasons."

As soon as the words "epidemic disease" were heard, the reporter's nerves became tense. Yan Gang looked at me and smiled and said: "You don't be so nervous. You eat the meat in your mouth is safe. The day before the slaughter of pigs, we will have related departments come to inspection and quarantine and send them to the slaughterhouse. We will also inspect quarantine and double insurance! Even pigs imported into Shanghai from other places will face such inspection and quarantine barriers, one at the crossing of entry, and one at the slaughterhouse. Diseased animals such as pigs, chickens, ducks, etc. And so on, the relevant departments will be unified to collect and destroy."

Is there no medicine to prevent and treat? The reporter's mind is inevitably full of questions. Yan Gang’s remarks solved the doubts in the reporter’s mind. He told reporters that after raising pigs for 30 years, he felt that pigs were increasingly difficult to keep. Previously, the pig-raising conditions were not so good, but as long as the pigs had enough to eat and drink enough, they would wait for the money after slaughter. The profit of 20% for each pig can basically be guaranteed. But now, it is most afraid of it being ill and can be said to be like baby. Serving the same, but it can't be avoided. Vaccines are used. Veterinary veterinary medicines are readily available. Sometimes, in order to seek insurance, they have to pay high prices for imported vaccines and veterinary drugs. However, they always fail to catch up with the rate of development of the virus. The accident is always frightening. When a group of gangs eat together, it can be seen at a glance of the pigs. The long-term mental stress is clearly reflected on the face.

"I really hope that our country will pay more attention to the biological products of animals and give us these escorts escort, so that we can also take a rest. I am old now and feel that I can no longer bear more pressure. Two farms have already been leased to others. If the situation does not improve, the last farm will not want to do it themselves.” Speaking of this, Yan Gang is inevitably somewhat desolate.

The increase in costs is not the key issue. Apart from the supply gap or the gap, “the rapid rise in pork prices during the past few months, the factors that infiltrate the inflation factors have indeed existed, but they are by no means the key factor. The immediate cause in my view is the shortage of supply. More than 800 yuan a ton to the current 3,000 yuan a ton, labor costs from more than 400 yuan per month to the current more than 2,000 yuan, have experienced more than 10 years, during which the price of pork ups and downs, this year won so powerful, or supply problems. The live pig market is a fully competitive market. Even if the price of each link goes up again, if the market is oversupply, then the price will still fall. Because pigs are not like commercial housing and other goods, the price is lower than the cost, and the big deal is not sold or produced. Warehouse, but the pigs can not, one after another, even if you raise a big one, you must sell even if you lose money. Otherwise, what will you do next?” Faced with the sharp rise in pork prices, Lao Yan’s phrase.

Yan Gang said that due to various reasons, the number of live pigs slaughtered on its own farm this year has been reduced by 2 to 30% compared with the same period of last year, and this phenomenon is certainly not an isolated phenomenon. What the reporter learned from other large aquaculture farmers in the same area confirmed that the words of Lao Yan were true, but the extent was different. Statistics from authoritative departments showed that the total number of live pigs slaughtered in the country also fell compared with the same period of last year.

Yan Gang said that the reason for the decrease in the number of people is that the accidental death of pigs is a serious problem, because the cost of raising a pig is more than 1,000 yuan. This cost will naturally be passed on to consumers.

The rising and falling prices have caused farmers to fall again and again as a result of the epidemic, which has led to a decrease in the number of slaughter pigs. The same rise in the market price of live pigs has also given birth to a shortage of live pigs. In 2007, pork prices rose rapidly. The state introduced a policy of propagating the pig breeding industry. Since then, pork prices have been controlled, and its side effects continue to ferment until today.

Fang Rong is an ordinary farmer in the outskirts of the city. In 2007, he saw the rise in pork prices and the country’s relevant subsidy policy. He bit his teeth on three pig sheds and spent 2,000 yuan on two gilts. In the first half of 2008, two gilts produced a total of more than 20 piglets. The family did not mention how happy they were. After raising them for six or seven months, the pigs sold them. However, Lao Lao couldn’t be happy again. Although the old sow was still in the piglet, he began to worry about the fate of the pigs, because the meat price in the market was not as high as before, but the feed price has always been In 2009, when the second batch of pigs slaughtered, they did not earn even a penny, and they took a lot of effort. In desperation, in early 2010, Fang Rong also sold two sows to Others.

Today, Fang Rong’s three pig sheds became fire grass. Every day, he sighed.

For example, Fang Rong, a farmer who follows the trend of raising pigs, is still relatively small in the suburbs of Shanghai. But what about the large agricultural provinces outside China? In one cycle and another, if they fell one time they might get up, but they fell several times in a row. Perhaps more people would jump out of this cycle in order to stop falling.

“The proportion of live pigs and large-scale aquaculture raised by farmers in our country is roughly 3 to 7, and almost all developed countries have carried out large-scale farming. Although the proportion of large-scale farming in China has expanded in recent years, it is still unsatisfactory. The biggest difference from large-scale aquaculture is stability. If a farmer raises live pigs, if one or two pigs do not make money, they will choose not to raise them. The cycle of calculating the scale of large-scale aquaculture production will be about 5 years. Pigs do not make money to reduce the amount of pigs. This year's pig gap, farmers do not raise pigs or pigs is also a reason. In order to maintain the stability of live pig supply, the state should actively encourage large-scale farming." Lao Yan said.

When will meat prices fall? At the end of the third quarter or at the end of the year, Yan Gang’s affair and Fang Rong’s pain reflected two major causes of the recent shortage of pigs. The existence of the gap directly led to the increase in the price of meat, and the rise in meat prices escalated the CPI index. Now many experts have expressed that In the second half of the year, we must stabilize Bao’s price on the “pig”. Will the pig lower its “worth”?

Fengxian is a key district and counties for pig breeding in Shanghai. The goal of this year's municipal government is to release 450,000 live pigs, accounting for one-fifth of the city. Zhang Weimin, deputy director of the Agriculture Committee of the region, told reporters that despite the severe pig production situation this year, However, the target set at the beginning of the year can be fulfilled. According to him, the supply of live pigs is still tight, and the people are still accustomed to eating fresh pork. Therefore, even if the country puts frozen pork on the market, the price of fresh pork will still run high in the short term. .

Then when will the shortage of live pig supply be filled up, the views of the industry are different. Some industry analysts believe that the number of live pigs in the country has begun to gradually rebound in February and March of this year and should be put on the market in August and September, which will ease the tight supply of live pigs. However, Yan Gang apparently disagreed with this view. He said that at present, there is a shortage of piglets. Even if there are piglets, the current time from breeding to slaughter usually takes four to five months. That is the end of this year and early next year. On the other hand, the current price of piglets has reached about 20 yuan per catty, a piglet with 50 pounds needs 1,000 yuan, and the cost of artificial feed will reach 1,800 yuan to 2,000 yuan. Apart from the fact that the breeding farm has its own nursery base, the farmers are at such a high price. Under the price, the purchase of piglets raised the slaughter, there is no courage to take risks, no one can estimate. When the reporter was interviewing the farmer Fang Rong, he made it clear that he would not go after the pigs again.

The most promising model: hog-and-wool futures These viewpoints on who is right or who is wrong, seem to be justified by the market, but even if this round of supply and demand conflicts are balanced, if we cannot solve the deep-seated reasons for the ups and downs of pork prices, then we will only Can not help but to meet the next cycle. Animal biological products must be vigorously developed and large scale aquaculture must be vigorously promoted. Should we also appoint a price guidance mechanism to the live pig market, so that the pig breeding industry will no longer be “staggered”, such as live hog futures. According to Li Shouyuan, a pig analyst at the Animal Husbandry and Veterinary Information Center of Shandong Province, pig hog futures as a financial means is a good way to achieve large-scale and specialized production of farmers and enterprises, and can help farmers, slaughter plants, and processing companies effectively avoid risk of price fluctuations. Lock in expected profits; it can also attract more investors at all levels to actively enter the market to participate in transactions and to activate the futures market.

“The hog futures model is to solve the problem of 'pig victims' and 'pigs hurt farmers' from the market mechanism level. This is the most promising mode at present,” said Li Shouyuan.

As early as 2008, the Dalian Commodity Exchange announced that hog futures will be launched soon, but there is still no future. But this road is definitely going to go. Because a few ups and downs in the price of pork has given us many lessons.