The reason for the milk dumping incident of Huaxi Dairy

The reason for the milk dumping incident of Huaxi Dairy: As the largest dairy enterprise in southwest China, the market retail price of Sichuan Huaxi Dairy suddenly decreased across the board, and it was sold at the lowest price in recent years, even cheaper than Coke and mid-range purified water.

Sichuan is much better.

According to information provided by supermarkets such as Carrefour, at present, the price of 300ml of Huaxi milk has plummeted from 2 20 yuan before the Spring Festival to 1 50 yuan at present; The price of each piece of Huaxi milk (300ml) has also plummeted from more than 50 yuan to 39 yuan.

The relevant person in charge of Huaxi Dairy expressed his helplessness: "Today we dump fresh milk, in order not to discourage dairy farmers' enthusiasm for feeding, to avoid them from killing cows, so as to keep the milk source in the future, we must survive this hurdle." In other words, even if the company's production capacity cannot absorb the purchase volume, and dozens of tons of fresh milk cannot be processed on time every day, it must insist on the purchase.

It is understood that at present, the output of milk sources around Chengdu has increased unabated, Renshou.

Many farmers in Xindu, Ya'an and other places have tried to raise dairy cows, which made the amount of fresh milk in the Chengdu market last year increased by 30 40 compared with the past.

After the Spring Festival, it is the off-season for milk sales, but the output of milk sources around Chengdu has increased unabated, and about 100 tons of fresh milk flow from the surrounding districts and counties to Chengdu Shiyangchang Milk Station every day.

The milk source is there, but there is a trouble that the supporting measures of the enterprise cannot keep up. When the German production line introduced by Huaxi Dairy is running at full capacity, the daily output can reach 100 tons; According to the normal operating state, the daily output can also reach 60 tons. However, to achieve this production capacity, the company has a daily electrical load.

At 1260 kV, the Shiyang Farm where Huaxi Dairy is located is currently a restricted electricity consumption area, which can only **620 kV.

At the same time, Huaxi Dairy released a word, what should be done now is not to reduce production, but to expand the scale of production, covering the southwest, northwest and other regions, and extend to North China", at present, the dairy output of Sichuan enterprises is still far less than some large foreign brands, such as Huaxi Dairy plans to produce 100,000 tons of fresh milk annually within 3 years, but this amount is still 3 5 times less than the current output of foreign brands such as Guangming and Yili.

In the view of Huaxi Dairy, since it is necessary to expand the scale, it is inevitable that the milk source must be kept first, and the family cannot be robbed, so it staged a drama that no matter whether they can bear it or not, they will stabilize it first.

Pour out the milk, just because the milk is too low at this time, and in order to maintain the higher **, the merchant would rather pour out the milk and wait for the ** to pick up before re-producing. "Pouring milk" is only to solve the economic crisis. The essence of a capitalist is to pursue profit maximization without limits.

The "insider" of the milk pouring incident is actually that under the influence of multiple domestic and international factors, the living space of ** dairy farmers has been sharply compressed, they have no right to speak, and the quality of the products provided is indeed not comparable to the imported milk source, so they have to accept the "picking" and even "oppression" of the enterprise. Behind the milk dumping incident is the pain in the development of China's dairy industry, not a conspiracy.

In this painful period, the relevant departments should take the initiative to find a greatest common divisor to effectively protect the interests of dairy farmers while promoting the transformation and upgrading of China's dairy industry.

Are you talking about the milk poured by the European capitalists in the midst of the capitalist economic crisis?

The crisis of the capitalist economy is a crisis of overproduction. Its general characteristics are: a large number of commodities cannot be sold, enterprises have closed down one after another, production has dropped sharply, the number of unemployed workers has increased sharply, credit relations have been seriously damaged, prices have fallen, cash is scarce, and the entire social and economic life has fallen into extreme chaos and paralysis.

Under capitalist private ownership, the production of individual enterprises is planned and organized, but the production of the whole society is in a state of non-existence, which inevitably leads to the imbalance of the entire social economy; At the same time, in pursuit of profits, the capitalists blindly expand production on the one hand, and desperately exploit the workers on the other, resulting in a contradiction between the tendency of huge growth in production and the limited purchasing power of the working masses. The development of the above-mentioned contradictions will inevitably lead to a crisis of overproduction. This kind of overproduction is not an absolute surplus, but a relative surplus, which does not mean that what is produced exceeds the actual needs of the broad masses of working people, but that it exceeds the demand for the ability to pay compared with the purchasing power of the working people.

Therefore, in the event of an economic crisis in a capitalist country, on the one hand, a large number of commodities are piled up and cannot be sold, and in order to maintain the quality of agricultural products, agricultural capitalists and a large number of farmers cry out for overproduction, destroy a large number of "surplus" products, replace coal with wheat and corn as fuel, pour milk into the Mississippi River, turn this river into a "galaxy", and burn cotton and cloth; On the other hand, the growing number of families of unemployed workers are struggling with the lack of access to essential food and nutrition.

It follows from this that the "pouring of milk" is only to solve the economic crisis. The essence of capitalists is to pursue profit maximization without limit, and pour out the milk, just because the milk is too low at this time, and in order to maintain the higher **, they would rather pour out the milk and wait for the ** to pick up and then re-produce.

A large amount of milk is poured down the sewer in the United States, why not give it away for free, the principle of economics tells you!

Reduce** and keep selling prices to maximize profits.

Differences: 1. Different properties.

The Huaxi milk dumping incident was due to commercial competition, due to the sudden reduction of the market retail price of Sichuan Huaxi Dairy, the company made a decision to regulate milk prices; Textbook: The milk poured into the stinky ditch in Western society is caused by the economic crisis.

2. The scope is different.

The Huaxi milk dumping incident is only a company's decision, which only affects the company, and does not involve other companies; Textbook: Milk poured into the stinky ditch in Western society is the operation of the entire Western milk manufacturers, which affects the entire West.

Similarities: It's all about solving problems.

Whether it is the West China milk dumping incident or the textbook The milk poured into the stinky ditch in the Western society is because of the milk price **, the product backlog, in order to stabilize the dairy market, control the lowest price, avoid the subsequent impact, and control the quantity of supply, so as to reduce the harm of inflation.

In the United States in the 30s of the last century, due to the general relative overproduction, most products were unsalable, which caused nearly one-third of enterprises to close down and workers to lose their jobs. In order to cope with the crisis of unprecedented severity and maintain the ** of the product, American agricultural capitalists poured milk into the Mississippi River.

From the perspective of the economic background, the milk dumping incident in the United States occurred against the background of a serious economic crisis, the economy had a major recession, a large number of enterprises collapsed, banks went bankrupt, workers lost their jobs, people's lives were difficult, and social turmoil intensified.

The "milk shortage" in 2013 caused enterprises to replenish their inventories through milk powder, and the domestic raw milk was not enough, so the company paid attention to foreign countries, so the imported milk powder naturally increased. That is, this year, the domestic dairy market and the international market began to fully converge, the degree of integration depends on how much imported milk powder enterprises use as raw materials, and in fact, the "milk shortage" in 2013 greatly promoted the acceleration of the integration process, prompting enterprises to use foreign milk powder as much as possible to produce products.

By 2014, the problem arose. Due to the rapid integration of the domestic market and the international market, the international market has just caught up with the sharp decline in raw milk ** and the situation of oversupply, so it has been transmitted to the domestic raw milk ** to decline, and the domestic oversupply situation has also begun to highlight. In this process, the company fulfills its social responsibilities and obligations while still collecting milk, and sprays powder into the warehouse if it cannot be sold, which eventually causes the milk pouring incident.

Milk dumping incident: Just after New Year's Day in 2015, there was an outbreak in some parts of Hebei Province where dairy farmers killed cattle and poured milk due to the refusal of enterprises to accept fresh milk. Prior to this, there were also incidents of dairy farmers pouring milk and killing cattle in Qinghai, Shandong and other regions.

In many parts of China, there have been incidents of dairy farmers "pouring milk and killing cows", not only in the main producing areas such as Qinghai, Shandong, Hebei and Inner Mongolia, but also in Jiangsu, Guangdong and other regions. The reality is that when Shandong fresh milk is at its lowest, a kilogram of milk is less than a dollar, and it is not even as expensive as the mineral water in the supermarket.

There have been a series of incidents of "pouring milk and killing cows" in the milk source, which is a realistic helplessness for dairy farmers; For society, it is tantamount to a huge waste.

In the final analysis, some dairy farmers "pour milk and kill cows" is a pain of industrial transformation, and the intensification of economic globalization should accelerate the transformation and upgrading of China's dairy industry, the core of which is two: one is to ensure safety, and the other is to improve quality.

Learning from foreign experience, the local government should help at this time, guide the establishment of cooperatives, cultivate new business entities such as professional large households and family farms, and improve the environment and technology of dairy farming, so as to help dairy farmers get out of the current predicament.

The reason why the milk is poured out is because there is a serious excess. Drinking it yourself will not solve such a serious problem of excess.

If the price is reduced, because the current state is a serious excess, and this is often an economic crisis, a large number of unemployed, the number of people who can afford milk is greatly reduced, if you reduce the price, other manufacturers will reduce the price more than you, ** further decline, the result is that your selling price is lower than the average variable cost, that is to say, a loss. So a price reduction is not advisable.

If you pour it out (why are you willing to pour it out later), the milk on the market will be greatly reduced, and the ** will pick up, and as long as the ** multiplied by the sales volume is greater than the production cost, you can make money. When the average profit of the whole society rises to zero, the equilibrium is maintained.

The question of why you are willing to fail: all manufacturers have your thoughts, and the end result is often that everyone suffers. In order to solve such a problem, all vendors can be enforced by uniting to form a contract.

Manufacturers get together to discuss how much each person should throw out. If you don't obey, you'll earn more than they all did, but later, they'll join forces to punish you. The power of one manufacturer wants to deal with the entire industry, that is a dream.

Your company is about to run out.

The United States in the 1930s experienced an economic crisis, and workers lost their jobs and did not have enough to eat. But the capitalists poured large quantities of milk into the Mississippi River, giving the whole river a white color.

This is to maintain a balance of value between the sectors that produce the "means of production" and those that produce the "means of subsistence". Once there is an imbalance, there will be serious social upheaval. It is a costly means of forcing a situation around.

The means of subsistence refer to what can be eaten directly, what is used, what is used, etc., such as steamed buns.

Means of production refer to raw materials and machinery, such as flour and steamers.

1. The production of milk is a long-term cost, the production cycle is long, the supply elasticity is small, and the market is not sensitive.

2. Because the elasticity of demand for milk is very small, the increased sales revenue from the price reduction cannot make up for the loss of the price reduction.

3. Using the elasticity theory we have learned, whether it is the United States or our current China, milk is a necessity of life, with little elasticity, and the increased sales income of price reduction cannot make up for the loss of price reduction. Because raising dairy cows is not making clothing after all, the production cycle is long, the supply elasticity is small, and the market is not sensitive. Three years ago, the development of dairy industry in Chengdu was promising, so many enterprises (with the encouragement of the first) have engaged in dairy production, so that the milk source is tight, and there has been a shortage of fresh milk.

Milk ** rose, and due to the small elasticity of demand, Ti** increased the amount of dairy farming and the revenue and profit of Huaxi Dairy Company. Therefore, the result of market regulation (plus ** encouragement) is to increase the amount of dairy farming, large and small dairy farmers combined, 1 day of milk production of 1000 tons. Among them, 80 tons of fresh milk poured into Huaxi Dairy, one of the top three dairy companies in Sichuan.

Today, three years later, with the participation of dairy companies large and small, the market cake has been dug to the extreme at the current level of technology, in other words, the market supply has increased and the consumer demand simply does not have the ability to digest so much milk. Reflected in the Huaxi Dairy Company, it can only operate at a scale of 60 tons of fresh milk per day, with a surplus of 20 tons. How to deal with these 20 tons, the contract with the dairy farmer is a long-term contract, and the contract cannot be broken casually, otherwise the milk source will be lost, whether it is a price reduction purchase or a refusal to buy, the future business contact will be severed.

In today's dairy industry with the advantage of scale to compete for the market and resources, this is to give their own supply of goods to decline, and the final loss is not comparable to pouring these milk. Even if some milk is poured at present, the market has also reflected, and the price of 300ml of Huaxi milk has plummeted from Yuan before the Spring Festival to Yuan; Each piece of Huaxi milk has also dropped from more than 50 yuan to 39 yuan, which is cheaper than Coke and mid-range pure water. The result of price reductions due to the inelasticity of milk is reduced revenues and profits.

With the development of the market economy today, Chinese people have gradually become less surprised by such things, and will not ask as in the past, "The disadvantaged groups can't afford milk, but you throw it away, how can you?" "This is a completely unfamiliar problem to the market economy. During the Great Depression in the 30s in the United States, milk was poured into the river due to the lack of macroeconomic control and no business consequences, so what is the reason for the phenomenon of dumping milk in China?

That's enough to make us think.