Before planning agricultural production, ask more about the seed market
The Beijing Xinfadi Agricultural Products Market is the largest agricultural products wholesale market in the country. This market usually reflects the supply situation of agricultural products nationwide, especially meat, eggs, vegetables and fruits. The prices in this market essentially play the role of a “barometer” for agricultural product prices.
At the Xinfadi market, the following phenomenon often occurs: oversupply of some vegetables coexists with shortage of other vegetables; oversupply and shortage of some vegetables appear alternately. Last spring, there were relatively many vegetable varieties experiencing “difficulty in selling”, including white radishes from Sichuan, Chongqing and Hubei, celery from Hebei, Beijing and Tianjin, and cauliflower from Hubei, Henan, Hebei and Beijing. This spring, there are relatively few vegetable varieties experiencing “difficulty in selling”, mainly concentrated in scallions and winter-stored potatoes.
On April 30, 2015, the wholesale price of scallions at the Xinfadi market was 0.3-0.7 yuan/jin; on April 1, the price was 0.4-0.5 yuan/jin, with the end of the month up 11.11% from the beginning of the month. The price in the same period last year was 0.3-0.9 yuan/jin, a year-on-year decrease of 16.67%.
In fact, since April last year, the price of scallions has been running at a low level, and this was even more evident at the beginning of this year. Fresh scallions in the Beijing market in winter and spring are mainly supplied by Fujian, Zhejiang and Shanghai, along with winter-stored scallions from Shandong, Hebei and Tianjin. Scallions transported to Beijing from Fujian and Shanghai have a wholesale price of only 0.4-0.5 yuan/jin; for distributors, this price is not even enough to cover the costs of harvesting, peeling, packaging and transportation. Wholesalers cannot make money, and scallion farmers have even less income.
By comparing the price trends of scallions in recent years, it can be seen that scallions also exhibit the phenomenon of alternating oversupply and shortage. This alternating phenomenon of shortage and oversupply is what people commonly call the “big year and small year” phenomenon, and it is the result of regulation by the market's “invisible hand”.
Under market economy conditions, agricultural production is arranged by farmers themselves, and there is a fairly obvious mismatch between the small-scale production operating model of farmers and the large-circulation model of agricultural product supply. This mismatch inevitably causes instability in the supply of certain agricultural products. Relevant departments have tried to guide farmers' production, but with little effect, and an effective early-warning mechanism cannot yet be formed. This “big year and small year” phenomenon is still difficult to avoid for the time being. Whenever we see “difficulty in selling” in agricultural products produced by farmers, we always feel deeply distressed; whenever we see consumers complaining about the excessively high prices of some agricultural products, we also feel quite anxious. The prices of agricultural products are created in production, so regulating prices should start with regulating production.
Some people in the industry have suggested that farmers should think in reverse when arranging production, and should not stop planting next year just because this year's price is too low. This suggestion is actually not complete, and scallions are a vivid example. Last year around the Spring Festival, the price of scallions was relatively low; this year, with reverse thinking, the price is even lower. In fact, based on our years of experience working in the market, we believe that when farmers arrange production plans, they must investigate the sales situation of seeds and related agricultural inputs. Once seeds or related agricultural inputs become hot-selling, this agricultural product often faces “difficulty in selling” when it reaches the market. Therefore, when farmers arrange production, they should try to avoid hot-selling seeds and agricultural inputs.