If gasoline prices rise to 12 RMB per liter, will there be fewer cars on the road?

Yes, definitely. In 2019, pork prices surged to an all-time high—resulting in reduced pork consumption. Ironically, the first ones to buckle weren’t consumers, but pork vendors: one vendor recalled that before the price hike, he could sell three or four pigs per day; afterward, he managed barely more than one pig per day. The same logic applies to gasoline prices: when high fuel costs foster a habit of driving only when absolutely necessary, the number of vehicles on the road naturally drops significantly.

Why do pork prices remain stable despite rising gasoline prices?

The questioner’s reasoning contains two clear economic misconceptions: first, overestimating the weight of fuel costs in the final retail price of pork; second, applying the logic of small-scale, individual farmers to modern, large-scale hog farming. From a cost-structure perspective, over 65% of pig farming costs stem from feed—primarily corn and soybean meal—while fuel expenses for logistics and transportation amount to a negligible fraction of the cost per jin (half-kilogram) of pork. Moreover, prices of major feed grains have declined steadily over the past two years, meaning feed costs for pig farmers have actually decreased. On the supply side, the notion that ‘low prices discourage production’ held true only in the era of smallholder farmers. Today, China’s hog industry has entered an era of large-scale, corporate competition. Major pig producers have invested enormous fixed capital upfront; as long as pork prices stay above their cash-flow break-even point, they won’t readily scale back production. Instead, they boost breeding efficiency (e.g., via PSY—pigs weaned per sow per year) to lower average costs, keeping overall market supply consistently abundant. Compounding this, falling beef and poultry prices have strengthened substitution effects, while consumer dietary preferences shift toward low-fat, high-protein foods. Thus, under the dual pressure of ample supply and cheaper alternatives, pork prices simply lack upward momentum.

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