When the government "strokes" to support the market, when will the price of pork stop falling and rise?

According to the latest data released by the National Bureau of Statistics on July 9, pork prices continued to fall in June, down 13.

Since the beginning of this year, pork prices have fallen continuously and have entered the first-level warning range for excessive declines

Why does the government temporarily purchase and store pork at this time? What standards need to be met for temporary purchases and storage? What impact will it have on pork price trends?

Excessive decline entered the "first-level warning", the government purchased and stored 20,000 tons of pork

When prices rise excessively, the government temporarily releases reserves to stabilize prices; when prices fall excessively, the government initiates temporary purchases and reserves to provide a “base” for the market

Since the beginning of this year, domestic pork prices have fallen for 22 consecutive weeks, and farmers have suffered serious losses

Why choose to start temporary purchasing and storage at this time? There is a core concept here: pig-to-food ratio

The pig-to-food ratio is the ratio of the price of live pigs to the price of corn used as feed

The price ratio of pig food in China is based on the ratio of the weekly price of live pigs monitored by the National Development and Reform Commission to the average wholesale price of second-class corn in major wholesale markets across the country

Based on this price comparison, the National Development and Reform Commission adjusted its pork price plan on June 9 this year

According to the monitoring of the National Development and Reform Commission, from June 21 to June 25, the national average pig-to-food ratio was 4.

According to the plan, when a first-level warning of excessive decline is issued at the national level, the central and local governments will start purchasing and storage in an all-round way

How was the purchasing and storage scale of 20,000 tons determined? According to the plan, the size of the central temporary reserve will be determined through consultation with relevant departments

The government has taken measures to stabilize the expectations of farmers, and the price of meat in Beijing has rebounded at the end of June

The plan has clear requirements to implement temporary reserve purchases and storage to achieve effective "supporting the market" target requirements

This pig price plan adjustment is the fourth adjustment to the pork price plan since 2009

On June 5, 2009, the National Development and Reform Commission announced the start of frozen pork storage and storage

Compared with the rapid results in 2009, the effects of purchasing and storage in 2010, 2012, 2013, 2014, and 2019 have all been delayed to a certain extent, and the effects will gradually show up even when the second purchasing and storage of that year.

Specific to this purchase and storage, Liu Tong, manager of the Statistics Department of Beijing Xinfadi Agricultural Products Wholesale Market, believes that the 20,000 tons of purchases and reserves are still relatively small compared to the total pork output, but they are confident in stabilizing pig prices and restoring farm confidence.

The price of pork has continued to decline for a period of time, which has caused farmers to appear pessimistic and even panic selling
.
However, since the end of June, pork prices in Beijing have rebounded
.

Beijing Xinfadi market monitoring data shows that on July 2nd, the average wholesale price of white striped pigs in Xinfadi market was 19.
75 yuan/kg, up 19.
70% from 16.
50 yuan/kg in the same period last week (June 25), week-on-week.
Rise sharply
.

Analyzing the reasons for the increase, Liu Tong believes that after a period of digestion, the proportion of super-sized white striped pigs in the market has dropped significantly, and the average weight of newly listed white striped pigs has been reduced, resulting in a decline in the market supply of pork
.

At the same time, the government started purchasing and storing measures to stabilize the expectations of farmers, and the selling psychology weakened
.
The slaughterhouse also saw this opportunity and started the price increase procedure in advance, making the price of meat rise earlier than the price of pigs, and the rate of increase in meat prices was higher than that of pig prices
.
So far, meat prices have basically climbed out of the bottom
.

Predicting the later trend of pork prices, Liu Tong believes that in light of the situation in Beijing, it is not easy to reach the high point at the end of June in a short period of time.
The price of meat may fluctuate for a few days.
It is better that the farm can basically close to profit and loss.
Balance point, but the phenomenon of deep losses has been reversed
.