Why do pork prices rise and fall so much? The key lies in the mechanism!

A good pork price generation mechanism is the key yardstick to measure the success of the market-oriented reform of the pig industry. What is a good pork price generation mechanism? Even if the wholesale price of pork rises, the retail price also rises, consumers should spend more, and the wholesale price of pork falls, and the retail price also falls, stimulating consumers to spend less and spend more.

Pork prices rose slightly after nine weeks of decline as of July 2, with an average weekly price of 19.89 yuan per kilogram, still down 24.3% from a year earlier, according to monitoring data from the Ministry of Agriculture. According to Xinhua News Agency, the continued decline in prices is the result of a combination of factors such as an increase in supply, low feed prices, changes in residents' consumption habits and off-season in the market. at the same time, the market also shows a differentiation phenomenon that the price of high-end brand pork is firm and the price of ordinary pork "falls endlessly".

The whole pork industry chain is mainly composed of five links: breeding, slaughtering and processing, cold transportation and cold storage, wholesale and retail. The factors that may cause great fluctuations in pork prices are mainly concentrated in the three links of breeding, wholesale and retailing. As long as there is something wrong with one link, the pork prices collected by the investigation institutions from the market may be distorted. Price is the key regulator of the relationship between supply and demand of live pigs. if the price data collected are distorted, it is almost inevitable for the stock of live pigs to rise and fall periodically as the main basis for adjusting the relationship between supply and demand of pork.

The transmission chain of pork prices is: when the feed price rises and the pig stock rate is high, there will be wholesalers to crack down on pig farmers, retail stall owners to suppress wholesalers, and retail stall owners to make profits at both ends, both cheaply and keep the sales price unchanged. In this case, pig farmers suffer a clear loss, while consumers suffer a hidden loss. If feed prices fall or run low for a long time, and the pig stock rate is high, wholesalers also crack down on pig farmers, and retail stalls also crack down on wholesalers. Under such circumstances, pig farmers can basically guarantee that they will not lose money, and wholesalers can also avoid losses. Retail stall owners profit from both wholesale and retail, while it is still consumers who suffer hidden losses. The decline in pig prices for nine consecutive weeks is a typical manifestation of this situation.

If the feed price rises and coincides with the low pig stock rate, then pig farmers can avoid losing money, wholesale prices "rise with a rising tide", wholesalers can ensure normal profit points, retail pig prices immediately rise, and retail stalls are natural and unrestrained as usual. it is still consumers who suffer losses. The above three situations all start with the observation and investigation of the retail link, and then generalize it in turn, which is the conclusion that faces the problem directly from the distortion of the price transmission in the circulation link, which is most in line with the actual situation of pork price fluctuation.

In addition, it is worth noting that the total pork output has shown negative growth for many years in a row, and dropped by 3.43% last year compared with the same period last year, reflecting the trend that pork consumption has shrunk year by year. The pork, beef, and mutton markets have gradually opened wider to the outside world, and the first batch of high-quality frozen beef imported from the United States will first be put into the retail markets of Beijing, Shanghai, Guangzhou and other big cities. In addition, in the household pork consumption, the consumption proportion of pork products has increased year by year, the diet structure of residents has changed, and the concept of "green brand" brand pig has been infinitely hot fried and overdrawn, and so on, all of which have a new impact on the generation of pork prices. Although at this stage, the impact of these factors on pork price generation is still limited, but it will show a trend of increasing accumulation year by year.

A good pork price generation mechanism is the key yardstick to measure the success of the market-oriented reform of the pig industry. What is a good pork price generation mechanism? To put it simply, even if the wholesale price of pork rises and the retail price also rises, consumers should spend more; while the wholesale price of pork falls, the retail price also falls, stimulating consumers to spend less and spend more. In both cases, the former transmits the signal of increasing supply through consumers spending more, while the latter digests the oversupply by consumers spending more.

Obviously, the current pork price generation mechanism is not smooth, mainly because the retail pork price has been in an abnormal state for a long time, and the management of retail seems to be the key to solve the problem. However, retail stall owners are also full of complaints, complaining that stall fees and other management fees are too high. at present, more than 80% of the various vegetable markets in cities and towns are private investment and contracted management, and the operators are also dissatisfied with nowhere to complain. What is the root of the problem? One of the main reasons is that since the 1990s, the vegetable markets originally defined as public welfare services, including those that have been built and expanded one after another, have almost all become private or self-employed, and have almost completely lost the nature and function of public welfare services.

Some people think that the ups and downs of pork prices are due to the lack of supply-side structural reform, and advocate increasing supply-side reform to overcome this price fortress. Supply-side reform is certainly needed, but it is not a master key. To establish a normal pork price generation mechanism, we should start from giving and constantly strengthening the public welfare service attribute of the vegetable market. This is the key to solving the ups and downs of the pig industry.