Study on Economic Effects of Mutton Price Rising in China

Mutton is one of the important livestock in China. In recent years, mutton price rose sharply in China because of slowed mutton supply, increased consumption, mutton sheep breeding costs and other reasons. By using relevant statistical data, this paper analyzes the impact on sheep production, meat consumption and CPI caused by rising mutton prices. The study shows the following results. First, mutton price rising would increase mutton supply, and its short-term and long-term price elasticity are 0.31 and 0.76 respectively. Second, it would increase residents' consumption expenditures, the negative impact of low-income groups and border areas inhabited by minority residents suffered greater. Third, mutton prices rising will push CPI, but its impact is limited. Based on the above results, this paper puts forward some policy recommendations. First, sheep production should be given more policy supports. Second, government should provide subsidies to lower-income groups and minority groups living in border areas. At last, strengthening price monitoring and early warning is also a must.