First, we should deeply understand the great role of futures.
As a derivative of the spot market, live pig futures have three main functions. For rural farmers, we should not understand each and every one of them unilaterally.
price discovery
Finding value is the basic function of futures, especially when the price deviates from the value greatly, which is conducive to the rapid return of value. Like today's pork, living at the high price of 30 yuan/Jin actually has a strong demand for the return of value.
Futures is an investment.
When it comes to the investment function of futures, there are actually many profound statements. Generally speaking, it is what many people understand as buying low and selling high to earn the difference. Of course, this kind of investment has a threshold, which is not only reflected in the amount of funds, but also needs professional knowledge as the foundation and professional profit methods as the guarantee, otherwise it will be difficult to survive.
Conducive to the return of pork value
Pork has been rising for two years, from 6 yuan/kg at the beginning of 20 19 to 30 yuan/kg today. The time and scope are enormous. The ecological destruction of pig industry is the main reason for the high price of pork. Now with the gradual recovery of the industry, the output has recovered to 80%, but the price of pork remains high. I wonder if you have thought carefully about the reasons?
After this round of shuffling of pig industry, the structure of farmers has undergone major changes. In the past, it was mainly rural family retail investors, but now it is mainly large-scale farms and even listed companies. They are large in number and have stronger pricing power in the market.
Recently, it has become normal for meat prices to rise, fall slowly or not, because these huge enterprises lack hedging tools and their ability to resist risks is too poor. In fact, this is understandable. Once the finally supported enterprises go bankrupt due to the sharp drop in meat prices, the industry will once again fall into a swamp. After the listing of live pig futures, large enterprises can preserve their value, and pork prices are more emboldened, making it easier to return ahead of schedule.
The pig industry has entered a period of strong and weak differentiation.
Driven by capital, large-scale breeding companies will maintain more stable breeding benefits, because they not only have large-scale and advanced management models and epidemic prevention experience, but also have stronger impact resistance to market prices. However, the operation of small enterprises and retail farming will be more difficult, not only with high cost, but also passive when prices fluctuate, and even go bankrupt in severe price cycle fluctuations.
As a spot derivative, futures will play an increasingly important role. However, the operation of the pig industry will still follow the inherent laws of the market and is still determined by the basic supply and demand relationship of the market. Whether it is meat price or breeding benefit, it will only increase the promotion. It will be a year when meat prices return, and it will be even more ups and downs because of the listing of live pig futures. Let's wait for the benign development of the market, I believe there will be great changes.