Fluctuation Characteristics and Causes of Hog Price in China

This paper applies the H-P Filter and EGARCH model to analyze volatility characteristics of China hog price from January 2000 to August 2017. The results show that the trend of fluctuation in China hog price appears new characteristics of short-term negative growth since 2012, meanwhile fluctuation cycle length is becoming shorter and has asymmetry. Then this article makes empirical analysis on the causes of fluctuation of hog price as well as the degree of influence from the following three aspects:the supply-demand relationship, the money supply and the price index. In the supply aspect, rising production costs make effect from the source on promoting hog prices rising trend, and the fact that retail investors still account for the main body of farming structure, their frequent and large-scale adjustment of breeding behavior exacerbates the hog price volatility. On the angle of demand, the increase of population and per capita income expands the market demand of hog resulting in the prices rising continuously. What's more, pork replacements as eggs, have some checks and balances on hog price fluctuation. Johansen cointegration test explains the hog price fluctuations in the money supply has "overshoot" effect, and impulse response function shows that the price index of hog price fluctuations has certain positive influence. The paper holds the view that perfecting the relevant regulations to deepen supply-side reform of breeding, advancing the scale and professional development in breeding, strengthening financial macro-control and accelerating the construction of hog futures market should be done to tame price abnormal fluctuations in order to in avoid the "overshoot".