The Shock Effect Of Avian Influenza On The Price Of Eggs In Xinjiang Province

In recent years, avian influenza outbreak frequently around the world, and China was notspared too. The highly pathogenic avian influenza has been outbreaking in about25provincessince2003, seriously affected the healthy development of social economy, and the poultryindustry suffered most grievously. The outbreak of avian influenza impact the supply anddemand of poultry market, leading the frequent fluctuations of the poultry products’ prices,makes the egg price fluctuate significantly. The stability of egg price not only influences thecost and quality of consumers’ living, but also restricts the poultry production anddevelopment, since egg is an important species of food, as well as the major source of famer’income. Therefore, the study of the shock effect of avian influenza on egg prices and itsindustrial chain transmission mechanism is of great significance for promoting poultryindustry recovery from disaster and improving the macro-control of price.Based on relevant research achievements both domestic and abroad, this paper takeXinjiang province as example, using the method of quantitative and qualitative to analyze thedevelopment of the poultry industry and the status of the epidemic prevention and control indepth, and examine the fluctuation characteristic and the main influential factors of egg price,and quantitatively evaluate the effect of avian influenza on the egg price through building aknock-on effect model. Test the price transmission relationship between long-term andshort-term of the egg industry chain using VAR model, and discuss the pathways andefficiency of egg price volatility transmission along industry chain, accordingly, put forwardthe corresponding policy and suggestions. The following are conclusions of this paper:First, during the October2002-April2012, the trend composition of egg prices inXinjiang shows similar linear upward trend, the fluctuation characteristic of seasonalcomposition is significant, periodic component contains three complete cycles, and therandom component does not have obvious regularity, but showed dramatic fluctuations in2003、2005-2006, indicating that avian influenza caused impact of different degrees on eggprice in those years.Second, chicken prices、CPI、the price of laying chicks、layer feed price have a positiveinfluence on the fluctuation of egg prices, but the coefficient of egg price and the scale ofavian influenza which is measured by the monthly number of infected poultry is negative, showing that the larger the scale of avian influenza, the greater degree of egg price’ change inthe opposite direction.Third, the results of the knock-on effect evaluation model show that avian influenzaaffect the supply and demand through farmers’ production capacity and consumer confidence,leading the significant fluctuation of egg price in market. The knock-on effect increasegradually in the first six months, then show a decrease trend during the later six months, anddisappear after six months, the price return to its original path.Fourth, there is a long-term equilibrium among price systems in egg industry chain.There are positive relationships between the price of laying chicks、layer feed price、chickenprices and egg price., and1%change of each price can cause egg price change respectively0.12%,0.44%,0.39%.The error correction coefficient is-0.4376, indicating that when theprices of egg industry chain fluctuate in the short term, those prices will revise to theequilibrium price under the long-run equilibrium relationship restraint by the intensity of43.76%.Fifth, the price transmission of egg industry chain is not smooth, there is a month delay.After the egg price is shocked by avian influenza and other incidents, the price of layingchicks、layer feed price and chicken prices response to it in the second month. The results ofvariance decomposition show that the contribution of the random impact of egg price on theprice of laying chicks、layer feed price and chicken prices are27.35%,19.18%,15.25%,indicating that the random impact of egg price has a more significant effect on other prices inegg industry chain.