How big is the impact of the decline in food prices on agricultural materials?

Summary: in October, with a large number of new season corn on the market in Northeast China, corn prices continued the downward trend in August and September and continued to decline on a large scale. On September 18, the national temporary storage corn was listed and priced at 1 yuan / jin, which was up to 0.13 yuan / jin lower than last year's temporary storage price. The national average price is currently around 1 yuan, and the price of corn in some areas has fallen to more than 80 cents.

When prices fall, there will naturally be a chain reaction. Then the decline will inevitably bring about the adjustment of the planting structure, especially the impact on large growers, directly from making money to losing money, will also have a certain impact on land circulation. Here we would like to focus on the discussion: what impact will the fall in corn prices have on agricultural materials?

1. Will the degree of credit sales of agricultural materials increase?

When the income from planting decreases, farmers are even more reluctant to take out the money, or they are short of money. Especially for the large corn growers of hundreds of mu, the net profit of one mu of land in previous years is only more than 200 yuan, but this year's corn prices have dropped, and it is almost impossible to make a profit. In the case of no profit guarantee for farming, farmers will not easily buy agricultural materials with cash, not to mention that the large households themselves have poor anti-risk ability and serious credit sales.

Through farmers will wait for corn sales, pay agricultural funds, but this year because the price is too low, so hoarding, selling, so that the time of credit will be extended, to some extent, will affect the turnover of funds.

So this year, dealers and retailers should start thinking about what kind of reason to get their credit money back. Do you insist on cash? Or will the price war on credit continue?

2. Will the prices of related agricultural materials fall?

From a rational point of view, it will have little effect on the price of agricultural materials. As far as pesticides are concerned, the cost of using corn on an acre of land is not high, about dozens of yuan, or no more than 100 yuan at most. For fertilizers, the reduction of corn storage price will not cause corn fertilizer prices to decline, because after the restoration of VAT, fertilizer costs have been significantly increased, profit margins have been compressed very low, and there is little possibility of further reduction. However, if the planting area of corn is reduced next year, the amount of corn fertilizer will naturally be reduced. This will have a great impact on dealers and agricultural enterprises that focus on corn crops.

However, China's agricultural material market has been irrational, and farmers' consideration of cost may set off a new price war in the agricultural material industry. Whoever can reduce the comprehensive cost will have the market advantage, which will optimize the agricultural material market. Perhaps to reduce the circulation of agricultural materials e-commerce to bring a certain promotion.

3. Will the transfer of land be accelerated or blocked?

The decline in income is a blow to the enthusiasm of retail investors in farming, and an even greater blow to large growers. For those who want to transfer land before planting on a large scale, this undoubtedly makes them more worried, and they will carefully consider the large households who want to further expand the planting scale. after all, many large households have not found a good profit model.

For retail investors, the average wage of migrant workers is about 3000, which is far more profitable than farming, so when food prices fall, retail investors will want to transfer the land as soon as possible. In this way, there will be a contradiction. Retail investors want to transfer out, while tenants are worried and cautious. Liu Chunxiong, a senior researcher at sales and Market magazine, believes that the final result is a reduction in the price of land transfer, which tends to be rationalized and normalized.

4. Will there be more opportunities for agricultural resource integrators and agricultural machinery?

As income declines, farmers will think more about planting costs. Similarly, the cost of agricultural materials will be taken into account when purchasing agricultural materials. The price of agricultural materials is difficult to decline in the previous analysis, so farmers will consider cost-effective agricultural products.

Some experts believe that in the future trend of agricultural products, the brand will be strengthened and then weakened. High-quality brand agricultural materials first occupy the market, so that there is no room for second-rate agricultural materials to survive, and then everyone's choice of agricultural materials will no longer be confused, and slowly agricultural materials brands will also be diluted.

With the reduction of grain prices, what farmers need most is to balance them with lower costs, so that input and output tend to be balanced. If seeds, pesticides and fertilizers can not reduce prices, then only a comprehensive agricultural package, to reduce the overall cost. Or integrate agricultural materials into integrated services.

Then the opportunity for agricultural machinery will come! Agricultural machinery is the most likely to integrate integrated services. For example, in the future plant protection, those who administer drugs will directly prepare pesticides to ensure the effect and collect service fees. Farmers do not need to buy agricultural materials themselves and then hire people to administer drugs, thus simplifying a process. Fertilizers and seeds can be done by the supplier of the same seeding machine. Agricultural enterprises should begin to dock with agricultural machinery and integrated service providers. For example, pesticide companies can cooperate with plant protection drone enterprises and organizations to give medicine directly to farmers in the future, and so on.

The above is only a trend analysis and conjecture based on the decline of corn prices, if it is a short-term behavior, it does not have much impact on the industry, but if low grain prices have become a long-term situation, then we should be prepared to adjust. In addition, no matter whether grain prices fall or not, planting is a thin-profit industry. Whoever can reduce costs and provide good services will be able to occupy the future market, and can not only consider making good products alone.