Fur industry endures two tough years, still has not emerged from trouble

This year fur prices generally dropped 30 to 40 percent, and many breeders have switched to other trades

As winter arrives and the weather gets colder and colder, many city residents have begun choosing cold-weather clothing. On November 8, reporters visited the market and found that fur, as a standout among cold-weather garments, has seen a sharp drop in price. At the same time, the prices of fox pelts and mink pelts used to make fur have also fallen to a low point, and breeders are operating at a loss. Large farms are storing up pelts and waiting for high prices, while some small-scale backyard breeders have quit the industry. Multiple people in the trade said the fur industry's slump is mainly affected by a range of factors including the market environment and breeding scale.

Shops: fur discounted, few customers

Every winter, some city residents buy fur to keep out the cold, but many people have noticed that this year's fur prices are much lower than in previous years, and some stores have even started discount promotions already.

⟦NL> On the morning of November 8, reporters went to Wanjin Leather City near the intersection of Jiankang West Street and Aiguo Road in Weicheng District. Reporters found that some stores had already placed new fur made from fox pelts, mink pelts and the like in prominent positions, with prices for various furs ranging from several hundred yuan to several thousand yuan, and high-end products costing more than 10,000 yuan.

“This year's fur prices are much lower than last year's; the newly arrived styles are not priced high, and older styles are even cheaper.” said Wang, a shop owner selling fur. The fox fur in his shop sells for about 2,000 yuan per piece, while the same product could sell for 3,000 yuan last year. “This year fox pelt prices are relatively low, which has caused fur prices to fall by a large margin as well.”

During the reporters' visits, they found that although many stores had put fur out on display, very few customers came to buy fur. “Every morning I open early, but hardly any consumers come by; some people walk in, take a look around and leave.” shop owner Ms. Liu told reporters that last year's fur sales were already low, and judging from the current situation, this winter's fur business is expected to be even harder.

Afterward, reporters went to the clothing section of the Weifang Department Store near Shengli West Street in Weicheng District, where several stores had already put out fur and were selling it at special prices, with prices between several hundred yuan and several thousand yuan. In a fur specialty store, a reporter picked up a piece of fur and asked the price. “This is a mink fur; the current price is 8,200 yuan, more than 2,500 yuan cheaper than last year!” a salesperson said. Although fur prices have dropped quite a bit compared with last year, not many people are buying. “Compared with last year, fur prices this year have generally dropped 30 to 40 percent.”

Breeders  Fox pelt prices fall to a low point, barely breaking even

That day, reporters went to Qufan Village, Gudi Subdistrict, Hanting District, where many villagers raise foxes at home. When the topic turned to this year's fox pelt prices, the breeders could not bring themselves to feel happy at all: “This year, not losing money on raising foxes is already good enough.”

At the home of breeder Ma Sufen, she was busy feeding her foxes. “Based on the current market, one fox pelt sells for between 200 yuan and 400 yuan, a price that simply cannot compare with previous years.” Ma Sufen told reporters.

Having raised foxes for 15 years, Ma Sufen has witnessed the price changes in the fox market. In her first year raising foxes, the purchase price per fox pelt was about 200 yuan, later rising to five or six hundred yuan, then to more than 800 yuan in 2012, while in 2013 the purchase price per pelt not only broke through 1,000 yuan but at one point reached 1,500 yuan, and many breeders made money because of it. But the good times did not last; fox pelt prices began falling in 2014 and have kept falling to the current level.

“Foxes mainly eat chicken livers, duck frames, chicken heads and the like, with a certain amount of grain and feed added. Fortunately, these feed prices are a bit lower this year, which has reduced costs.” Ma Sufen said that according to this year's market, if one fox pelt sells for 400 yuan, she can barely break even, and if it is below 400 yuan, she will lose money.

One mink pelt is only 100 yuan; stockpiling in hopes of high prices

Compared with foxes, mink has met the same fate, with its value also dropping sharply. Especially this year, the price of one mink pelt has just passed 100 yuan, and breeders have said one after another that mink farming is currently in a loss-making state, so many people are stockpiling the mink pelts produced.

At noon that day, reporters went to Xibei Dong Village in the Junbukou Comprehensive Project Area of Weicheng District, where Li Hongqi, head of the Hongqi Mink Breeding Professional Cooperative, was inspecting the more than 9,000 mink in his own sheds.

Li Hongqi has raised mink for 30 years and has experienced five major ups and downs in mink pelt prices. He told reporters that mink pelts sold for five or six hundred yuan at the best of times, and even in the first half of 2013, mink pelt prices could still sell for 400 yuan. But starting in August 2013, mink pelt prices began to fall. At this time last year, male mink pelts were priced at about 150 yuan and female mink pelts at about 110 yuan. This year prices are even lower: male mink pelts sell for 120 yuan each, and female mink pelts for only 80 yuan each.

Li Hongqi said that although feed costs have dropped quite a bit this year, raising mink still does not make money. The feed cost for one male mink is about 130 yuan, and the feed cost for a female mink is about 80 yuan, and this does not even include costs such as labor and water and electricity.

Reporters saw that next to the mink sheds there was a small room, which was Li Hongqi's cold storage for pelts. “At the current price, selling pelts will definitely mean losing money.” said Li Hongqi's son Li Rongming. His family has already stored more than 5,000 mink pelts and will sell them when the price rises.

Unable to hold on, many small-scale backyard breeders quit one after another

In the cooperative, Li Hongqi can be considered a large-scale breeder, with rich breeding experience, and he can still hold on when mink pelt prices enter a trough. But the small-scale breeders and backyard raisers could not bear it and quit the mink farming industry one after another.

Li Hongqi told reporters that the cooperative once had more than 150 breeder households, covering five counties and urban districts of our city. But starting in the second half of 2013, some backyard breeders could not withstand the low prices and began to quit mink farming. “Now there are still more than 80 breeder households holding on in the cooperative.” Li Hongqi said helplessly.

Wang Mingzong began raising mink in the Economic Development Zone in 2011, when mink pelt prices were relatively good and he was in a profitable state. But by the first half of this year, he could no longer support the various costs of mink farming. Left with no choice, he had to temporarily stop raising mink and switch to doing something else. “Although some other small-scale breeders are still raising mink, they are basically struggling to keep going.” Wang Mingzong said.

Analysis: a small cycle every three years

Regarding the current pelt prices of foxes, mink and other animals, Li Hongqi said that a large portion of our city's pelts are exported to Russia, and Russia's economy is currently in the doldrums with the ruble depreciating, which to a certain extent has affected the fur market. On the other hand, in previous years the pelt prices of foxes, mink and other animals were rising, letting many breeders make big profits, which increased fox and mink breeding numbers and expanded breeding scale, leading to an ample supply of pelts and a drop in prices.

Ma Zefang, chief expert of the Shandong Province Fur Animal Industry Technology System, said that since the second half of 2013, raw pelt prices at the world's four major fur auction houses have fallen sharply by nearly 50%, putting enormous pressure on the breeding, processing and retail segments of China's fur industry, and mink breeders in Shandong and across the country have been affected by this, with the market falling again and again.

“The low pelt prices have lasted for more than two years now. To restore prices to previous levels and allow breeders to profit, the breeding scale for foxes, mink and the like needs to be further compressed.” Ma Zefang told reporters that the fur industry has a small cycle every three years and a big cycle every five years, and after the breeding scale shrinks, prices will naturally rise slowly.

“For mink farming, breeders should persist in scientific breeding, select excellent varieties and adopt scientific methods, so that the mink produced have short fur, a high pelt yield and are not prone to shedding hair, and fast-grown mink pelts must be eliminated.” Ma Zefang said that much of the fur produced domestically, because the varieties are not yet good enough, is exported abroad but cannot fetch a good price. Therefore, breeders should actively improve mink varieties and raise the quality of pelts.