Pork prices are "flying" Where do we go?

“I have seen pigs run and eaten pork, but I have not seen such expensive pork.” On July 5, after taking a look at the price tag above the meat stalls, Chen Jian, who came to buy vegetables at the triangular food garden in Shanghai’s Wan’an Road, Not without emotion. "Pure meat 18 yuan / kg, ribs 26 yuan / kg, with a wallet heart 17.5 yuan / kg, with skin and leg meat 17 yuan / kg, loin meat 20 yuan / kg ... ..." in this golden cold meat yellow The figures that were altered many times on the price tag on the bottom black are striking.

"The current price has exceeded the level of February 2008." The stall owner told Times Weekly. In his memory, the price of pork at the time of 22,88 yuan per kilogram was "the highest in ten years." He "didn't expect this record to be surpassed so quickly, and it was during the summer months that this was the off-season time for pork."

“Some places have even seen a “one-day-a-price” rise.” The data detected by relevant departments such as the Ministry of Commerce and the Ministry of Agriculture also confirmed that pork prices “have risen loudly”. “The average pork price in the country for the first two weeks of May was 20.24 yuan/kg, up 48.25% year-on-year (compared to the same period of last year), and up 1.80% month-on-month (compared to the same period of last month). The average wholesale pork price was higher than the previous June 20-26. It rose another 4.5% a week, a 68% increase from the same period of last year. From June 25 to July 1, the pork price was 25.37 yuan/kg, which was a rise of 0.85 yuan/kg, a year-on-year increase of 3.5%, and 22.43 yuan/kg at the beginning of June. Compared to the price, the price rose by 13% in one month."

From past experience, pork prices have a greater impact on CPI. So, what are the reasons for the rapid rise in pork prices this round? In fact, as the price of pigs continues to rise, pigs in Shandong, Jilin, Hubei and other pig producing areas have begun to appear “grabbing pigs”. This has also caused many people in the industry to start worrying about the “roller coaster” market where prices have gone up and down again.

Industry "period law"

Looking at the empty situation in the pig farm, Wang Wensheng, head of the Taishun pig farm in Wanshun, Suqian City, Jiangsu Province, told reporters of the Times Weekly to sigh "it is not a good life."

It turns out that there were more than 200 sows and thousands of pigs in the Wanshun Taihu farms, but in the last round of pork price cuts they had to kill most of the sows, leaving only 20 sows and A small amount of piglets.

“The price of pigs dropped sharply in 2008 and 2009, and the more you lose, the more you lose. You can't support it. You can't handle most of the sows and piglets in early 2010, and you can’t afford it.” I really didn't expect this year's pork price to be so good, and I was considered to have lost both ends," Wang Wensheng said.

Treatment of sows at the time was not a "case." Times Weekly reporter found that in June 2010, Sichuan, Jilin and Jiangxi provinces continued to fall below cost prices due to pork prices.

“This time, the price of pork rose due to cyclical fluctuations in pork prices.” Wang Xiaoyue, animal husbandry analyst at Beijing Oriental Agritech Consulting Co., Ltd., told the Times Weekly reporter.

“The pork price for the same period last year has reached the lowest price for the whole year last year. This is because the increase in pork prices in 2008 was very good. In addition, the country has economic subsidies to encourage the raising of female sows. For the sows that were added in 2008, generally there will be two or three piglets for slaughter, and the increase of live pigs will be directly reflected in the amount of pigs slaughtered last year. This is particularly low, and as a result, many farmers have suffered serious losses and abandoned pigs. This has directly led to a significant shortage of pigs in the middle of this year."

Like Wang Xiaoyue, Feng Yonghui, general manager and chief analyst of China Live Swine Early Warning Network, also believes that the primary reason for the “hot price of pork prices” in a year is the “supply and demand” relationship affected by the periodic price of pork.

“The fluctuation period of the national meat price is generally 3 years. From September 2006 to April 2008, the pig price is in a rising period, and the profitability of pig raising is more; from May 2008 to April 2009, it is in a period of falling down, raising pigs. Profitability; from May 2009 to May 2010, during the low season, pigs suffered heavy losses; since June 2010, the price of pigs has risen steadily and is now rising. “Feng Yonghui told the Times Weekly reporter.

The problem of live pig disease at the end of last year and early this year has exacerbated the imbalance in the supply and demand relationship. It turned out that the epidemic diarrhea before and after the Spring Festival was a devastating blow to the production of piglets. In general, sows produce more than 10 calves, but the result is a rare "only child" or "twins" phenomenon, which directly affects the current supply of pork.

According to statistics, the number of pig slaughter in Shandong province, a direct result of the epidemic, has been on a monthly downward trend since January this year: the number of pigs slaughtered was 7,247,800 in January, 6,506,200 in February, 6.464 million in March, and 626.29 in April. Ten thousand. Originally, the amount of live pigs has been reduced, and after this blow, there are even fewer slaughtered animals. There is no doubt that this has played a role in fueling the market price of pork.

“Before 2006, the pork market fluctuates periodically but it has been relatively stable. It was precisely because there were relatively few pig diseases in the past. From 2006 to the present, there will always be some ups and downs in the price of pork. The main factors are the disease. , directly affect the structure of live pigs, affecting the market supply, thereby driving up the market price. "Feng Yonghui pointed out that" the epidemic is a point source of pork prices deviated from the key to people's expectations. "

The inflation pork sample is “forget it or not to buy pork.” On July 5, the reporter discovered that the high pork price allowed Chen Jian to choose other meats.

However, Zhong Jianhua of the Chengde Liang breeder farm in Suqian City, Jiangsu Province, told reporters that they did not earn any money. "Although this year's market is good, it is considered that we have made up for the deficits of the previous two years. However, to tell the truth, we really do not make any money," Zhong Jianhua said.

On the other side, people in the city can't afford to eat pork. On the other side, the pig farmers complain that "in fact, they haven't earned any money."

In addition to the cyclical changes in supply and demand, the “crazyness” of pork prices is also related to the general background of the entire society’s inflation, which directly leads to a significant increase in the cost of raising pigs. Not only does the pig farmer eat up the profit. A big one, but also affected the rise in pork prices.

“An important reason for the rise in pork prices is the increase in costs.” Feng Yonghui pointed out that “the proportion of corn in the pig feed is the largest, and the latter’s price has risen not very small this year. In addition, human and There are also a number of increases in transportation costs. According to Feng Yonghui's calculation, the cost of raising pigs at this time last year was about RMB 4 per catty, and this figure was directly pushed up to 6.5 yuan this year.

According to Wang Wensheng, the company's raising cost per pig has risen by about 180 yuan this year. Among them, the price of corn feed is now 2.34 yuan per kilogram, which is an increase of about 0.45 yuan over the same period of last year. According to data recently released by the Ministry of Commerce, the national corn price rose by 9.8% year-on-year, and the average purchase price of corn by aquaculture companies also rose by 9.8%.

As far as labor costs are concerned, a direct reflection is that rising prices have led to an increase in workers' wages. "Original workers' average monthly wage is about 1,800 yuan, but now it is 2,200 yuan."

The rise in labor costs, as well as the invisibility, has led to a large number of free-market households that have played a compensator role in the pork price market.

In this regard, Wang Jimin, director of the Animal Husbandry and Economics Research Institute of the Institute of Agricultural Economics and Development of the Chinese Academy of Agricultural Sciences, specially stated that: "Last year from the end of last year to the beginning of this year, migrant workers had been devastated across the country. This meant that migrant workers, especially young laborers, were in a tight state. The pig farmers face the choice of going out to work or continuing to raise pigs. Since pork prices have been hovering in the trough last year, some of the free-ranging households have opted out of the pig market to work in cities, resulting in a reduction in the supply of live pigs."

"With inflation, everything is on the rise. It is not realistic to expect pork prices to remain stable," said Wang Xiaoyue. It is no wonder that a report by CICC on June 20 directly considered that the sharp increase in pork prices was affected by the increase in pork demand caused by the ultra-currency of money in addition to the current supply factors discussed.

The reporter noted in the report that the number of live pigs at the end of 2010 has dropped by about 3%. As of May, pork prices rose 48% year-on-year, and hog prices soared nearly 70%. "It is hard to believe that a 3% drop will lead to a price increase of more than 50%." “We believe that the sharp increase in pork prices this round, in addition to supply factors, also reflects the side effects of loose monetary policy in 2009-2010,” the report said.

It is worth noting that the rise in pork prices alone may bring about a surge in CPI. Some organizations pointed out that compared with the beginning of June, pork prices rose by 13% within a month. Therefore, "although the price of fruit has fallen, the prices of vegetables, aquatic products and meat have continued to rise in June, and the CPI for the month may have risen by 6.5% year-on-year."

The regulation solution "The recent pork price is so high that people who buy meat are significantly less." The above-mentioned Jinyu cold meat stall owner said. Faced with high prices, both wholesalers and retail hawkers are as laughing as the public. "Our profits have been reduced by half and the cost has gone up."

The downstream industry is also not easy. The reporter noticed that the restaurant evaded pork prices by directly raising prices or reducing meat dishes. In fact, those pig farmers who have benefited from the increase in pork prices in this round are also mixed. "We were really scared by this "roller coaster" market." Wang Wensheng told the Times Weekly reporter.

In this regard, Wang Xiaoyue pointed out that considering that the supply elasticity of the live pig market is greater than the elasticity of demand, it cannot rely solely on the self-regulation of the market, and the government is not entirely unable to regulate the live pig market, but it needs to pay attention to methods and methods.

However, as an industry expert consulted by the National Development and Reform Commission, Feng Yonghui is not very optimistic about the government's adjustment. “A review of measures adopted by governments at various levels in adjusting pork prices in recent years will find that there is a dilemma of 'more and more chaos'.”

In particular, Feng Yonghui mentioned that in August 2007, in response to rising pig prices, the State Council promulgated the "Opinions on Promoting Pig Production and Stabilizing Market Supply". In the following year, the Ministry of Finance also successively introduced ten policies to support pig breeding.

According to the Opinions, pig breeding grounds and chicken farms can receive a maximum of 1 million yuan from the central government. Each sow can receive a direct subsidy of 100 yuan per year. The breeding sows also have insurance, and each sow is insured. Fee 60 yuan, if the sow died midway, you can get 1,000 yuan compensation. The commodity pig compensation standard is 500 yuan. Even for the 60 yuan premium, the breeding company only needs 12 yuan, and the rest is paid by the government. In addition, there are high-efficiency facility subsidies and large-scale injection subsidies. There is also great support on credit, and loan approval for loans is loose, and there is full subsidy. Not only that, the government also provided land for aquaculture companies.

“Over the years, the competent authorities have firmly believed that the main cause of pork price fluctuations is the low level of scale and industrialization of China’s hog production. They want to follow the example of the United States because the latter’s experience shows that when scaled farming accounts for the market, More than 80% of pork prices will tend to be stable and industrial risks will be controlled.

I understand this. However, the increase in pork prices at the time has already stimulated pig farmers to increase production. The government is also eager to launch a series of incentives to increase the enthusiasm of pig farmers. As a result, pig production capacity has increased dramatically in the short term, and has subsequently shown a sharp drop in prices. . Feng Yonghui pointed out.

Wang Xiaoyue also pointed out that Goldman Sachs, Deutsche Bank and many domestic private capitals entered the swine industry in this situation. It turned out that in 2008, foreign investment bank Goldman Sachs China also joined the ranks of pig-raising army, in the "special zone" of pig breeding in Hunan, Fujian wholly-owned acquisition of more than 10 professional pig farms. Interestingly, some people believe that the “crazyness” of pork prices is the result of speculation by investment banks such as Goldman Sachs.

"Regulating the production of live pigs does not eliminate fluctuations, but rather avoids wasteful use of resources and industrial damage, due to excessive volatility, on the premise of respecting the laws of the market." Feng Yonghui pointed out: "Compared to the promotion of large-scale production, the government should provide more Early warning information for pigs should be better protected against pig disease.