How does Jiyuan City stabilize pig production amid falling pig prices?
I. Market decline, breeding losses
Since the beginning of 2009, pig prices have continued to fall. Live pigs, piglets and pork have dropped from 13.6 yuan/kg, 25 yuan/kg and 20 yuan/kg at the beginning of the year to the current 9.4 yuan/kg, 19 yuan/kg and 16 yuan/kg, declines of 30.9%, 24% and 20% respectively. Pig prices have already entered the trough of a new round of cyclical fluctuation, and a rebound in the short term is unlikely. As pig prices keep falling, grain and feed prices are still running at a high level. The pig-to-grain ratio has fallen from 9.44:1 at the beginning of the year to the current 6.71:1, already below the 7:1 break-even point for the Henan region. Coupled with frequent pig diseases, high rates of sow miscarriage and piglet mortality and so on, breeding returns have declined. Many pig farming enterprises are in difficulty, and most farmers are operating at a loss. According to analysis, the current production cost of pig farming in our city is about 9.8 yuan/kg, and selling one pig results in a loss of about 40 yuan. A few pig farmers have begun to cut back their scale to reduce losses.
II. The plunge in pig prices has its reasons
The plunge in pig prices is the result of a stage of industrial adjustment. Looking at the cyclical operation of the live pig market, after experiencing the trough period of 2005-2006, it reached a peak period from August 2007 to August 2008. Especially around the Spring Festival of 2008, pig prices reached a historic high, drawing particular attention from all sectors of society. Strongly driven by preferential policies and high market profits, other industries began to enter pig farming. Large pig farms such as ten-thousand-pig farms and one-hundred-thousand-pig farms emerged, production capacity increased substantially, quickly causing relative overcapacity and creating a situation of oversupply. As far as our city is concerned, judging from the 2008 subsidized sow situation, sow inventory was 86,409 head, a year-on-year increase of 48.2%, causing a rapid increase in live pig inventory.
The plunge in pig prices is the result of the financial crisis. The financial crisis caused many export-oriented enterprises in some coastal areas to suspend work and business, migrant workers returned home, and demand for outward shipments declined, while the absorption capacity of producing areas is limited, so demand decreased relatively.
The plunge in pig prices is the result of food safety incidents. The “lean meat powder” incident and the sudden influenza A (H1N1) incident fully exposed the plight of the pig farming industry under the media spotlight and accelerated the plunge in pig prices. In addition to the above reasons, changes in people's dietary structure and the increase in pork substitutes are also root causes of the decline in pig prices.
III. Respond actively, stabilize production
In order to ease the pressure on the pig farming industry caused by falling pig prices, our city has taken active action, mainly adopting five measures to respond:
First, guide the live pig industry to shift from quantity to both quantity and quality development. In 2008, our city's policy rewards and subsidies for newly built large-scale pig farms highlighted breeding scale, as well as facilities such as manure treatment and harmless treatment, or pig farms adopting bio-environmental technology. In 2009, our city raised the standards for rewards and subsidies for newly built large-scale pig farms: the scale was fully raised from the standard of 1,000 head in plains areas (500 head in mountainous areas) to more than 2,000 head; in terms of subsidy standards, pig farms with annual slaughter of 2,000-5,000 head and 5,000-10,000 head are given two tiers of rewards and subsidies of 10,000-30,000 yuan and 30,000-50,000 yuan respectively. The higher the construction standard, the more reward and subsidy funds are received in that tier. For existing pig farms converted into standardized large-scale pig farms, a 30% reward and subsidy is given according to the corresponding scale. In terms of breeding methods, emphasis is placed on the use of bio-environmental pig farming technology and the promotion and use of the “livestock-biogas-vegetable (fruit)” circular planting and breeding model. At present, the whole city has declared 24 newly built pig farming projects. Of the 13 large-scale pig farms that have started construction, 5 large-scale pig farms adopt the bio-environmental pig farming method. Other newly built pig farms must have harmless treatment facilities, manure treatment facilities and other facilities matching their scale; 8 farms have declared pollution-free certification materials and are carrying out pollution-free production transformation.
Second, serve leading enterprises well and solve problems the pig farming industry may encounter. Carry out the enterprise service year activity, establish a leading group for the enterprise service year activity, summarize and sort out the problems that enterprises need to solve, set up a general account, assign them to relevant departments and towns (offices), and set deadlines for completion. At present, more than 10 specific problems such as land use, seed purchase, site selection and funds have been coordinated and solved for leading enterprises, ensuring the normal operation of production services for leading enterprises. The introduced Shuanghui Group, a national top 500 enterprise, has invested 220 million yuan to build a project with annual slaughter of 1.5 million live pigs and processing of 33,000 tons of low-temperature meat products. It was completed and put into production at the end of July this year and can solve the problem of live pig sales locally. The municipal government has signed a contract with Shuanghui for annual subsidy of inspection fees. The 500,000-head live pig production base built by Shuanghui Group in our city has introduced new technologies such as biogas power generation for treating pollution from the pig farming industry.