Analysis of the impact of the Coronavirus on China agriculture and livestock breeding

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Analysis of the impact of the Coronavirus on China agriculture and livestock breeding
Mar 12,2020

Shengda Water saving co., LTD. as an equipment manufacturer, scheme provider and operator of water-saving irrigation projects with large scale, full variety and high comprehensive technology in the field of water-saving irrigation in China, always pays close attention to the latest trends and cutting-edge information in the field of agriculture.


The author talks about the impact of the coronavirus on agriculture and stockbreeding, we have to start with the price of pork. According to the data from the SARS in 2003, pork prices remained stable due to the restricted movement of people and the blocking of the transportation of goods, which prevented pork from reaching the market in remote areas. As a result, the supply of pork on the market decreased. However, on the demand side, the catering enterprises themselves are unable to control their own, so the demand side has declined, supply and demand both decline, so the price fluctuations are not obvious. Pork prices were flat during the outbreak in 2003, but then pent-up consumer demand exploded and pork prices rose sharply in October 2003. 


Back to the current situation, the flow of people around the control, some areas of road blocking, blocking the traffic, circulation disorder, pigs across the region transport blocked, the main selling areas and production areas of pig spread expansion, such as Guangdong and Heilongjiang, Jilin Province and other places pig spread more than 10 yuan/kg. At the same time, the large trading market was forced to close, which affected meat. Meanwhile, the restaurant industry suffered a similar disaster in 2020, with both supply and demand hit. However, the pork industry was just hit in 2019, which was optimistic that it would recover in 2021.


Through the comparison of 2003 feed prices fundamentals can also be seen. Soybean meal and secondary yellow corn prices remained stable during the outbreak, but accelerated after the outbreak ended. Look at the chicken price, 2003 SARS during the price of white stripe chicken has a big fluctuation, first a small rise, then a crash down. Then look at the broiler enterprises, Guangdong province broiler production enterprises wen group, a period of the average daily sales of broiler from the SARS before 800,000 shrinking to 400,000, backlog of more than 3.3 million broiler, during the average price of broiler dropped by 70%.


However, after the end of the SARS , the price of white-striped chicken retaliated and rose, and the trend of pork is similar, so we mildly expect that in the later period of this coronavirus, the price of livestock and poultry will go up in different degrees, the above is the industry hit by the coronavirus relatively big. Although the outbreak is sudden and widespread, with the concerted efforts of the whole country, it will be contained for some time to come until it is over.

As the coronavirus will be controlled eventually, the economic impact of the coronavirus will gradually fade in the long term and bring changes to the development of China's agricultural economy. First, will promote the development of agricultural economy transformation. The outbreak of SARS in 2003 changed the way agricultural products are traded and promoted the modernization of agricultural products circulation. This outbreak highlights the shortcomings of agricultural trade and circulation patterns, and points out the direction for the future development of agricultural trade circulation patterns. Second, it will stimulate the demand for green food and further promote the supply-side structural reform of agriculture. The public will pay more attention to food safety, so that the product inspection standards will be stricter and the food traceability system will be more complete, which puts forward higher requirements for agricultural products and provides better opportunities for the development of green agricultural products. 


Moreover, the fragility of agricultural production has been exposed in the semi-sequestration caused by the outbreak. It is foreseeable that in the future evolution process of agricultural production bodies, we will strive to overcome this shortcoming, will pay more attention to scale, will pay more attention to the extension of the upstream and downstream of the industrial chain. At the same time, local governments will pay attention to the complete construction of the industrial system, and further distribute agricultural products processing industry in rural areas. 


At the same time, affected by the coronavirus, the time for migrant workers to go out for work will be delayed, and the proportion of migrant workers will also be reduced, so that some farmers' unions choose to work at home, which will ease the labor shortage of rural enterprises, so that rural enterprises get better development space. 


Therefore, the agricultural and rural sectors should turn passivity into initiative, and actively adapt to the changes under the influence of the coronavirus, and promote the transformation and upgrading of the agricultural economy by providing certain subsidies and loans with discount interest to the agricultural production bodies, and building and improving the processing system of agricultural primary products in the county area.


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