Vertical Coordination of Hog Supply Chain in China

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Vertical Coordination of Hog Supply Chain in
China

• Yingchun Dai
• Shudong Zhou
• Nanjing Agricultural University

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Outline

• Introduction
• Survey and findings.
• Conclusion

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Current hog supply chainin China
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Current hog supply chain in China

• Hog production very small-scaled production
  pattern dominates.
• Slaughtering stage about20,000 abattoirs in 2002
• Processing low concentration rate
• Retailingsupermarket and open-market coexist

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Innovative fresh pork supply chain

• In recent years, innovative fresh pork supply
  chains led by large slaughters develop quickly in
  China.
• Supply chilled branded pork
• Closer vertical coordination between slaughtering
  and retailing stage
• Lack of closer coordination between slaughtering
  stage and finishing hog production stage

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Purpose of study

• To identify marketing channels used by hog
  producers
• To identify factors producers consider when they
  choose marketing channels
• To explore producers attitudes toward closer
  vertical coordination
• To elicit the willingness of producers to
  participate in contract production

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A survey on hog producers

• In 2003, 289 hog producers in 10 counties of
  Jiangsu Province were interviewed.
• Structured questionnaire was used.

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Marketing channels adopted by hog producers
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Producers attitudes toward closer coordination
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Contracts used in selling hogs

• 64.1 percent of producers indicate they use
  informal oral or written short-time marketing
  contract in selling hogs. But this kind of
  contract is very similar to spot market since it
  is arranged several days before transaction.

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Willingness to participate in resource-providing
contract
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Variables definition (1)
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Variables Definition (2)
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Table 6 Logit Regression Result
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Conclusion

• The current supply chain is a fragmented chain
  which lacks closer vertical coordination.
• Hog producers hold positive attitude toward
  closer vertical coordination.
• Empirical study shows that the age of producer,
  size of production, non-farm work, with credit,
  whether a member of cooperative and location
  affect producers willingness to participate in
  contract production.

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Thanks For Your Attention.