Beef and mutton prices are rising, so why can't farmers make money?

As the end of the year approaches, beef and mutton prices have finally shown some improvement. With the price of live sheep soaring, mutton prices have also begun to rise nationwide. Although live cattle prices have not surged like live sheep prices, they have slightly recovered, and at the same time consumption has grown relatively quickly, so beef prices have also risen.

That is the market environment, yet quite a few people in the industry have still reported to Niuyang Tiandi Network that they are not making money. Why exactly is that? Let's talk about this topic.

Looking back at November, sheep prices rose in a straight line, while cattle prices mainly grew in a fluctuating pattern. Correspondingly, beef and mutton prices both showed a small, slow rebound, and the price inversion phenomenon was fairly obvious. Under such circumstances, farmers did not sell at a profit, slaughtering and processing plants did not make money either, and consumers likewise did not enjoy low prices.

Where is the problem?

First, brokers were quite active throughout November, taking advantage of farmers' single sales channels and lack of information to buy and sell in between. In particular, Inner Mongolia experienced severe drought this year, with a sharp reduction in forage, and many herders were eager to send large numbers of cattle and sheep to market. In many areas, supply exceeded demand for a time, which provided the basis for brokers to buy at low prices;

Second, slaughtering and processing enterprises, hit by imported and smuggled meat, saw imported raw meat and live cattle and sheep further stir the market, so their demand for slaughtering domestic cattle and sheep fell further, and purchase prices were correspondingly lower. Even so, domestic beef and mutton prices remained higher than similar imported products, so the purchasing volume of slaughtering and processing enterprises, as the direct vanguard of the market, has a relatively large impact on the cattle and sheep industry;

Third, the catering industry has been sluggish for the past two years. Correspondingly, ordinary consumers' awareness has risen, and the cattle and sheep industry has not noticed or responded to this shift in consumption, still maintaining the model of several years ago;

Finally, meat distributors, in pursuit of profit margins, have turned one after another to imported beef and mutton products. Distributors' choices have influenced the choices of slaughtering and processing enterprises to varying degrees, indirectly squeezing the overall profit margin of the industry.

With the above analysis, do you now understand why you are not making money? So how should you respond?

The fundamental reason for the current situation is that the cattle and sheep industry is currently in a transition period. Every participant in every link of the industry needs to see the industry's future clearly and then change their thinking in order to respond:

1. Farmers need to increase their sources of information and expand their sales channels;

2. Brokers need to appropriately release some profit margin and avoid pushing prices down excessively;

3. Slaughtering and processing enterprises need to appropriately raise prices and earn profits through the added value of high-quality products;

4. Meat distributors need to adjust their sales strategies according to changes in the consumer market, rather than simply pursuing low-priced products and profit margins.

The transformation of the cattle and sheep industry is a relatively long-term process. This process requires every practitioner to reflect and respond, and only in this way can they secure a firm footing in the future cattle and sheep market over the long term.