Study On The Early Warning Management Of The Live Pig Price Risk In Shandong Province

Compared with the food industry，the live Pig industry plays an equally important partfor the national economy development. It not only affects the income of pig breeding,processing operators and consumers’ living costs, but also promotes the macro economyfluctuates. As the important part of animal husbandry, the live pig industry produces withspecific physiological characteristic; therefore, the live pig price volatility is inevitable.However, the United States, Japan and other countries of the live pig price are not smaller inthe fluctuating period, but are less than our country in fluctuation range. So, these show fullythat China’s live pig price fluctuation exists in price risk. The objective to establish live pigprices early-warning is to monitor and evaluate live pig price so that the price can be timelyadjusted and controlled when it is in abnormal state in order to guarantee the live pig pricesindustry to develop in a sustaining, healthy and stable way.As a big production and consumption province in the live pig, the early warning study onShandong province is very good representative. The study can not only guide significance forreducing the pig prices risks in Shandong province, but also provide reference for otherprovinces and even the whole country. This paper analyses Shandong province’s live pig pricerisks and risk sources, builds the early warning model of the live pig prices risk, and putsforward risk precontrol countermeasures.Firstly，the paper analyzes the live pig prices fluctuations for Shandong province byusing monthly prices for nearly a decade, and concludes that the live pig prices of Shandongprovince exists a very high risk.on the basis, the paper analyzes live pig prices risk sources,and summarizes three factors: the supply factors including the cobweb model, the productioncost, producers expected, the pig-breeding form; the demand factors including consumerincome level, population and urbanization, the live pig substitutes;the external environmentalfactors including the live pig disease and quality security issues, the live pig industry supportpolicies, import and export of the live pig.Secondly, through carding and evaluation to the common early warning model of the livepig price risks, The paper makes a new attempt on the early warning method, Selects systemdynamics method as the early warning model of the live pig price risks.According to theearly warning model process of the system dynamics: determining the purpose and systemboundary line, cause and effect diagram, flow chart of the system, putting forward the basic hypothesis of the model, parameter estimation and defining Model function, and applies themodel in Shandong province. The research shows that: the Early-warning model is available.Finally, aimed at controlling live pig price risk in Shandong, the paper puts forward tothe precontrol mechanism and countermeasures from four aspects of pig industry chainmanagement, the live pig industry subsidies, standard scale breeding and the live pig futures.Specific follows: based on the live pig industry chain management’s precontrol mechanismfor improving the organization scale on participation main body, lowering transaction costsand the interests, rationalizing profits distribution of the live pig chain, the paper puts forwardto optimize the live pig industry chain organization mode, improve the pig industry barriers toentry, and play the role of the government; Based on the live pigs industry subsidies’precontrol mechanism for increasing the supply of the live pigs, improving the income of thelive pigs producers, adjusting the structure of the pig-breeding, the paper puts forward toperfection of the live pig industry subsidies and policy safeguard; Based on standard scalebleeding’s precontrol mechanism for reducing the supply elasticity of the live pigs, reducingcosts, improving the pig industry barriers to entry and guaranteeing the live pig quality andsafety, the paper puts forward to moderate scale for the free-range farmers, scale up forprofessional farmers, standardization and scale synchronous construction for enterprises;Based on the live pig future’s precontrol mechanism for transferring price risk, easing the spotprice fluctuation of the live pigs, promoting the standard scale breeding, the paper putsforward to launch the live pig futures, and establish guarantee mechanism.