Li Guoxiang: Pork prices are mainly determined by supply and demand in the market.
Pork prices fall to nearly three-year low, experts say overcapacity is obvious
2014-03-29 08:48:50 Source: CCTV2
recently, people who go to the supermarket to buy meat in the vegetable market must be very happy. Pork with a 0.50kg of 10 yuan and 8 yuan feels cheaper than some vegetables. However, the pig farmers are quite depressed. The fatter the pig, the more they lose. According to the Xinhua News Agency's national agricultural and sideline products and agricultural materials price system monitoring, the national pork price has dropped to a low point in the past three years. So, what is pulling down the price of pork? According to the previous pig cycle theory, is the price of meat bottoming out now? CCTV financial channel host Shen Zhu and special commentator Li Guoxiang (microblogging), a researcher at the Institute of Rural Development of the Chinese Academy of Social Sciences, and Liu Ge, a famous financial commentator, commented together.
Pork prices have fallen and market monitoring has fallen to a near three-year low. Suppressing prices, the central reserve frozen pork storage started, why pig prices continue to be low? Cheap meat hurts farmers, expensive meat hurts people, pig farming how to break the pig cycle?
Xinhua News Agency's national agricultural and sideline products and agricultural materials price system monitoring shows that compared with January 31, the national daily average prices of pork belly and pork hip tip decreased by 13.2 and 12.1 respectively on March 26. In terms of regions, pork prices in all provinces, autonomous regions and municipalities across the country have declined. Among them, the price of pork belly in Shanxi, Hainan, and Chongqing, and the price of pork hip tip in Shanxi, Liaoning, and Chongqing has fallen the most, between 20.3-29%. At present, the national pork price has dropped to the lowest point since February 2011.
Wu Xiaodi (farmers):(price) almost no way to afford.
Zhong Xinfu (Director of the Information Center of the Animal Husbandry and Veterinary Bureau of the Jiangxi Provincial Department of Agriculture): I hope that as a farmer, I must look at this market rationally. If there is no strength, it is appropriate to reduce the scale. Second, taking advantage of this low price, we should eliminate some breeding pigs and cultivate some breeding pigs with higher ecological performance.
In order to further curb the decline in pig prices and protect the interests of farmers. On March 27, the Ministry of Commerce, together with relevant departments, launched the first batch of electronic bidding procurement for the collection and storage of frozen pork this year. And will continue to pay close attention to market changes, strengthen market monitoring and forecasting, early warning.
Li Guoxiang: The current decline in pork prices stems from the phase of overcapacity.
(Special commentator of CCTV Financial Review)
personally, I think it is a phase of relative excess. In recent years, the growth rate of our live pigs has slowed down, but the overall number of slaughter has increased. It was not until the beginning of this year that the amount of slaughter began to decrease slightly, so that the entire production capacity continues to expand, so the demand should be adjusted in the past few years, and it is relatively stable, or the growth is relatively slow. In this case, the long-term accumulation of excess capacity has not been transferred, so it is a phased overcapacity.
Because pork consumption is different from grain, grain is indeed an inverted U-shaped, so now to the protection stage, it should not be an inverted U-shaped, but an S-shaped. Then pork should be in our country. It has not yet reached the protection stage. It should be said that with the increase of residents' income in the future, it will still grow in the future. So now it is said that the per capita consumption of pork between urban residents and rural residents is still very different, and the consumption of low-income people in cities is also very different from that of high-income people. With the change of income situation, it should be said that the total amount of pork will continue to grow, and the per capita consumption will also increase.
Liu Ge: Under the stimulus of subsidies and market expectations, pigs have overcapacity.
("CCTV financial review" commentator)
in fact, because we were making large-scale subsidies in 2007, 2008, 2009, 2010 and 2011. So this subsidy actually a lot of industrial and commercial capital into the pig industry. We heard that everyone, including those engaged in IT, steel smelting and real estate, came to raise pigs. We felt that since there were state subsidies and there was such a shortage of pork, it would definitely be an upward trend. Therefore, under the effect of such a stimulus and the expectation of the market, this production capacity would grow very fast. Looking at it now, there is indeed excess capacity.
Pork, perhaps as a percentage of meat consumption, has generally declined. About 20 years ago, it accounted for 75% of our total meat consumption, but now it only accounts for about 45%. Well, in general, the importance of pork in the whole pig food consumption has actually been declining. In 2011, we have subsidies for those large-scale breeding, such as 200000, 400000 and 600000, that is to say, after you have raised how many heads, there will be subsidies. At that time, he built the house, threw it away, and then caught the pig seedlings. At this time, he could not easily say that he would not raise it, because agricultural production is generally a long cycle.
In fact, it is mainly the relationship between supply and demand. From 2009 to 2013, to 2014, the average fluctuation range of our pork price was more than 9 yuan per kilogram from the lowest point in 2009. At its peak, it reached nearly 20 yuan in the second and third quarters of 2011. That is to say, it fluctuates by more than 100 per cent. In the whole process, the fluctuation of grain, whether it is domestic grain or international market grain, has never been so great. In other words, there may be a certain correlation between each other, but on the whole, the fluctuation cycle of pork and the fluctuation cycle of grain price and feed are not completely causal, so I think it should not be regarded as the decline of grain price and feed price, which leads to the decline of pork price. I think this view is wrong.
Li Guoxiang: Pork prices are mainly determined by supply and demand in the market.
(Special commentator of CCTV Financial Review)
this is indeed the case now. Farmers are losing a lot of money. The cost of silence, we call it the sunk cost. Since 2007, pork prices have risen sharply, and even we can say that they have skyrocketed, doubling in a short period of time. At that time, a large number of industrial and commercial capital into the pig industry, all of a sudden the formation of this production capacity. Since 2012, pork prices have continued to be in the doldrums, phased, that is to say, seasonal increases, but in general, it should be said that pig farmers are comprehensive or generally losing money, so why doesn't he quit? So the main thing is that if he invests in it, he has already spent a lot of capital. If he withdraws now, then his production equipment and facilities cannot be turned into cash or income. If he withdraws and gives up, the cost should be higher. So he just died here to hang on.
It is true that the price of feed has fallen, so the prices of major corn and soybeans have all fallen, which is good news for farmers and eases the pressure on their pig prices to fall. But I personally think that in a short period of time, the decline in feed prices is not the direct cause or decisive factor leading to the decline in pork prices. Because in a short period of time, pork prices are mainly determined by the supply and demand of the market. Then there is an oversupply and prices fall. Of course, in the long run, pork prices are highly correlated with costs; but in the short run, their correlation is relatively small.
Liu Ge: The price of beef and mutton will continue to rise and will become as expensive as beef and mutton in Korean dramas.
("CCTV financial review" commentator)
I don't know if you have noticed some plots in Korean dramas. In the last 20 or 30 years, the diet of Koreans has also changed. The total amount of beef eaten per person is increasing, possibly doubling in 20 years. The original words, 3, 4kg, now to 10kg. But there are only so many cows, then the price will go up at this time, so we are now facing the same problem as South Korea.
In the case of beef and mutton, the supply is not keeping up. The price of beef and mutton will continue to rise, and will continue to rise for a long time. If we only rely on our Chinese territory to supply China's beef and mutton, it is certainly not enough. For too many years, it must be the same as what happened in South Korean TV dramas. Beef must cost 400 yuan a 3. to 0.50kg. It is true that the second senior brother is very difficult to control, and Sun Wukong cannot control it, so you have to believe that you are better than Sun Wukong.
Li Guoxiang: The price of beef and mutton will continue to rise. This is a worldwide phenomenon.
(Special commentator of CCTV Financial Review)
mainly, I personally think that pigs, cattle and sheep have different reproductive abilities. For cattle and sheep, its reproduction should be very slow. It takes one to two years for a cow to be able to have a cow and a cub, and then a sheep can give birth to a cub a year. Therefore, when we were investigating in rural areas, the herdsmen were saying that they were in a hurry and the price was very high, but they could only be in a hurry and could not stimulate production. If from the perspective of demand, beef and mutton are relatively high-income consumption, then the price increase should basically have no binding force on its adjustment ability. Also, even if our Muslims and Muslims eat beef and mutton, they are not sensitive to the price. Then this supply and demand relationship, with limited production capacity and unregulated demand, can only be watched as it continues to rise.
Large-scale, it may not be able to lower the price, and sometimes even when the relationship between supply and demand is tight, it will raise the price. Why? Because as far as we know, herdsmen are also small-scale breeding. So now the centralized listing, slaughter, can get the market to sell, are often large-scale breeding. Large-scale breeding is mainly in the stage of fattening. If many herdsmen are concentrated in small-scale breeding, the whole market is in short supply and the supply and demand are tight. Therefore, they control the supply of this market, so the seller's market controls the market price. Therefore, the supply exceeds the demand, so they are likely to raise the price artificially.
I think beef and mutton will continue to rise. If the government does not take regulatory measures, it will rise even more during holidays. So now many places have increased the government's reserves. During the holidays, we will sell them to stabilize prices. The current rise in beef and mutton is a worldwide phenomenon, not a country.
Li Guoxiang: The establishment of a target price system must not distort the market.
(Special commentator of CCTV Financial Review)
as for the price of pork, I personally think that if the government does not regulate and let the market forces play a role, then it will definitely rise and fall in the end, which is inevitable. This is the result of all agricultural products without proper and better market intervention. Of course, if government intervention is inappropriate, it could exacerbate the volatility. Intervention is good and should be able to smooth out this market volatility. The market will inevitably bring about this kind of fluctuation, so the government wants to ease this fluctuation a little bit, but it is impossible to put an end to it, unless you do not engage in the market.
So, how can the government become smarter? We just hope that the market will play a decisive role in the allocation of resources. He said that if it should be eliminated, let the backward farmers be eliminated. If the piglets born by sows are not good, you will kill them. Then part of the elimination depends on the market. So, the government has to protect the core capacity again, and not be able to eliminate too much, and when he needs it, you don't have it, so what? That's to say that the government intervenes again, but it doesn't distort the market, should it be eliminated or let it be eliminated, and that's what our government wants to do.
This year's Central Document No. 1 was put forward. In the future, pigs will be like grain. We will establish a target price system. It is hoped that it can protect the enthusiasm of pig farmers and protect the core production capacity. On the other hand, it can not distort the market.