Empirical analysis on fluctuation of pork price in China

The paper analyzes on fluctuation of pork price by presenting the VAR model and Impulse Response Function based on monthly data of the pork market from 2007 to 2011 in China. We impose our own interpretations on this problem and draw conclusions as follows: The fluctuation of pork price is not caused by the cost of pig breeding and circulation. External shocks especially epidemic outbreaks are the main reason. And the low degree of pig breeding organization has exacerbated the fluctuation of pork price. Therefore, in order to stabilize the supply of hogs to prevent large fluctuation of pork price, the government should pay special attention to epidemic surveillance and perfect the agricultural insurance system. With the long-term sight, the degree of organization of the pig breeding must be increased through encouraging large-scale breeding and promoting co-operative development of backyard farmers.