Stability Of "Company&Farmer" Mode In Pig Supply Chain

China is the world’s biggest pork consumption country, and pork is our main meatconsumption product, so stable pig price is the basic guarantee of China’s residents’lifequality. From the supply chain perspective, there are many stakeholders throughout thepig industry. It covers a lot of resources like human, finance, thus the in-depth study isnecessary. In recent years, company+farmer mode has been a popular mode ofsupply in agricultural supply chain. It solved the difficulties of small farmers go intothe big market through a contract. Farmers can adopt the advantages of capital,information, management and technology from the company, and reduce their cost andrisk when deal with the market. This paper applies commodity contract company&farmer mode in pig supply chain, and analyzes how spot price influence stability.From a supply chain perspective, firstly we introduced some basic concepts, andsummarized the domestic and foreign research status based on the study of extensiveliterature. Secondly we analyzed the development of upstream supplier (farmers) andmidstream manufacturer (slaughtering company) within China’s pig industry. Then thispaper selected monthly data of pig price and slaughtering in recent years, it came to theconclusion that the fluctuation of pig price is huge meanwhile prediction is difficult. Itmeant that a contract between slaughtering company and farmers is necessary. Thirdly,we introduced the model and some assumptions in the contract, and stimulate the profitfunction and game matrix, it came to the conclusion that one’s profit is positivelyrelated to the other’s contract performance probability. Forth, we obtained the contractprice on a fixed proportion of benefit allocation, and discussed the decision mechanismwith different spot price, finally got the spot price fluctuation rang to keep the contractstable, and the corresponding probability. Fifth, considered that both company andfarmer have the willing to improve the contract stability, we improve the contract tocertain extent on the idea of risk-pooling. Finally, we summarized this paper and madesome other recommendations to improve the long-term cooperation.