Research On The Profit Dilemma And Countermeasures Of Chinese Breeding Industry Under The Background Of Public Crisis

Pork is one of the most important foods for urban and rural residents.According to the data released by the U.S.Department of agriculture,there will be a total consumption of 768 million pigs in the world in2019,of which 540 million pigs are produced and sold in China,accounting for 70% of the total global consumption.Meanwhile,according to the statistics of the United Nations Food and Agriculture Organization in 2019,the consumption of pork in China accounts for 62% of the total consumption of meat.Although my country has become the world’s largest market for pig breeding,the degree of scale of pig breeding industry in China is still low.There are a large number of retail farmers with poor anti-risk capabilities.The pig breeding market is inherently vulnerable to the external environment,and there is pig cycle phenomenon.The sudden outbreak of public crisis will inevitably lead to the profit dilemma of China’s pig breeding industry.The breeding industry is closely related to the increase of farmers’ income,rural construction,residents’ consumption and the development of modern agriculture in China.In recent years,China’s monitoring of the breeding industry has become more stringent.In 2013,the “Regulations on Pollution Prevention and Control of Large-scale Livestock Breeding” was issued to strictly regulate the scope of environmental protection.In 2016,the pig industry production development plan planned to 2020 was promulgated,and it was proposed to "raise pigs from the south to the north".In 2017,the scope of the ban on pig raising has increased in the southwest,northwest and northeast.The implementation of environmental protection policies has restrained the expansion speed of live pig production capacity and eliminated some outdated production capacities.The breeding industry is facing increasing policy dilemmas.Taking the outbreak of African swine fever in August 2018 and the outbreak of COVID-19 in February 2019 as the public crisis background,this article selected the Muyuan Foods and the Truein Group,which were leading companies in the pig breeding industry before the public crisis.However,after encountering the profit dilemmas caused by the public crisis,Muyuan Foods got rid of the profit dilemmas and continued to make profits.The net profit in 2019 was 10 times that of 2018.The net profit in the first half of 2020 was twice that of the whole year of 2019.However,Truein Group,once known as "the first share of China’s pig industry",withdrew from the market due to its face value in October 2019 and was still loss until June 2020.This article first introduces the profit dilemmas faced by the Muyuan Foods and the Truein Group.Then,based on the analysis framework of the breeding industry’s profit dilemmas,it makes a comparative analysis from the five profit model elements of the two companies’ product behaviors,supply chain behaviors,financing behaviors,investment behaviors and cash behaviors,and probes into the problems existing in the profit model of the Truein Group.Finally,in view of the shortcomings of the profit model,this article puts forward the optimization measures for the breeding industry to effectively deal with these profit dilemmas.The research in this article found that there are differences in the business model,talent management and internal control of Muyuan Foods and Truein Group.And,these differences lead to huge different results of the two companies in dealing with profit dilemmas.Truein Group’s “company + base +farmers” management model is relatively low in breeding efficiency;there are not enough professionals in various fields;managements are overconfident;and internal governance has no effect.Those problems of Truein Group lead to the mistakes in the financial strategy selection and of the profit model elements’ behaviors,which in turn caused many profit dilemmas.Finally,taking the failure of Truein Group dealing with profit dilemmas as an example,this article suggests that Chinese breeding enterprises should adjust the breeding mode,improve the core competitiveness of products;integrate the upstream and downstream of the supply chain,speed up the cash and product turnover;reduce financing costs,improve efficiency of using assets;focus on the main business,optimize the equity structure and pay more attention to the reserve of professionals.Optimize breeding enterprises’ countermeasures of profit dilemmas by these suggestions.