1. Introduction
Xinjiang is one of the five major pastoral areas in China, and animal husbandry has always been one of the pillar industries of local economic development in the Xinjiang region of China. Due to the specific conditions of multi-ethnic settlement and Muslim population in Xinjiang, the mutton sheep industry has always had an important and irreplaceable position in animal husbandry production. Mutton is one of the most important consumer meat goods for local residents in Xinjiang. In recent years, with the gradual increase in mutton consumption demand, mutton prices have shown an obvious fluctuation trend. Therefore, it is of great practical significance to explore the influencing factors and action mechanism of mutton price fluctuation in Xinjiang. From the existing studies, many scholars have carried out studies concerning mutton price volatility from internal and external perspectives.
In regards to the internal influencing factors, the feeding and breeding costs caused by feed price, as the internal factors affecting the fluctuation of mutton price, have a certain impact on the fluctuation of mutton price. Scholars have undertaken considerable research from the perspective of feeding and breeding costs. In terms of feeding cost, Shi and Li [
1] analyzed the fluctuation of mutton price in China from January 2006 to November 2010. Their research results show that the change in feeding mode and the increase in feeding cost, caused by the rise in agricultural and sideline product prices, are the main reasons for the rapid growth of mutton price. In terms of breeding costs, for example, Zhao [
2] believed that the significant increase in mutton sheep breeding costs and the shortage of the mutton sheep breeding labor force are the main reasons for the rapid rise of mutton prices. Yu and Li [
3] thought that the mutton price in China was mainly affected by some typical factors, such as the mutton price in the previous period and the production cost in the current period. Furthermore, the influence of different factors on the price of mutton was verified by using a multiple linear regression model. For example, Hao and Qian [
4] believed that the general rise in prices and the continuous increase in production costs have played a key role in promoting the rise of mutton prices in China. In addition, Yu and Li [
5] and Yang et al. [
6] analyzed the influencing factors of mutton price fluctuation in Xinjiang. Their studies show that stock, feeding cost and demand are the main factors affecting mutton price in Xinjiang. Long and Liu [
7] constructed a vector autoregressive (VAR) model based on Xinjiang mutton price, feed price, beef price, consumer price index and world mutton price, and analyzed the impact of different influencing factors on Xinjiang mutton price fluctuation by using the impulse response and empirical model decomposition (EMD) methods. Zhao et al. [
8] found the decisive factors affecting the rise of mutton price in Xinjiang through econometric analysis. The results show that insufficient supply and high breeding costs are the leading factors affecting mutton price in Xinjiang. Similarly, Zhu et al. [
9] pointed out that production cost is the key factor affecting the price fluctuation of mutton in Xinjiang.
For external factors, many scholars have carried out some investigations on the reasons or influencing factors of the continuous rise of mutton prices. According to the different characteristics of influencing factors, the existing studies divide the main factors of mutton price fluctuation into traditional factors and non-traditional factors. Traditional factors mainly include changes in supply and demand, market factors and the external impact on substitute prices [
10]. For example, Yu and Li [
3] believed that the price of mutton in China is mainly affected by the price of mutton in the previous period, the production cost in the current period, the output of mutton in the previous period, the population growth rate and the inflation rate in the previous period. Sun et al. [
11] found that the reduction in output, the increase in demand and increased cost were the main direct factors for the continuous rise of mutton price. The main medium level indirect factors were low comparative benefit, extensive feeding management, low reproduction rate, high disease (death) rate, reduced stock, low slaughter rate and light carcass. The insufficient policy support, the low scale effect, the incomplete industrial chain, the imperfect breeding and extension system of improved varieties and the imperfect epidemic prevention and control system are the main deep-seated causes. Fan and Fu [
12] found that the stock of mutton sheep, the carcass quality level of mutton sheep and the market price of mutton significantly affect the supply of the domestic mutton market. Ding and Xiao [
13] revealed that the number of sheep and carcass weight have a significant impact on China’s mutton production, and the income level and mutton price have a significant impact on per capita mutton consumption. The continuous increase of mutton production and per capita mutton consumption will lead to the continuous rise of mutton price. Shen [
14] found that the living standard, income level and population of urban and rural residents in the consumer market are the main factors affecting the fluctuation of mutton price. Therefore, the external traditional factors affecting the fluctuation of mutton price include mutton supply, mutton demand, the price of agricultural and sideline products, the price of substitutes and the number of people.
In addition to traditional factors, non-traditional factors mainly include international livestock product prices, future markets, energy prices, exchange rate factors, monetary policy and capital flows [
15]. For example, Long and Liu [
7] found that mutton price, beef price, feed price, the consumer price index and world mutton prices are the main factors affecting the fluctuation of mutton price in Xinjiang. Fan and Fu [
12] found that per capita consumption and income level are important factors affecting the current per capita consumption of urban and rural residents. In addition, international mutton prices have a significant positive impact on domestic mutton exports. Zhu and Xu [
16] showed that money supply is another external factor affecting the fluctuation of mutton price. Likewise, Zhang and Wang [
10] believed that money supply is an important reason to affect the price fluctuation of livestock products in China. There are significant structural mutations in regards to the impact of international prices of similar products on beef prices and mutton prices. Chen and Xiao [
17] thought that the per capita income level, mutton price and beef price have a significant impact on the mutton consumption of urban residents, and the poultry consumption price also has a significant impact on the mutton consumption of urban residents. Therefore, the non-traditional external factors affecting the fluctuation of mutton price include the international livestock product price, international crude oil price, exchange rate and money supply [
18].
In summary, existing studies have analyzed the internal and external influencing factors of mutton price and have achieved considerable research results. However, the existing literature only focuses on some influencing factors of mutton price, and does not analyze the internal and external influencing factors of mutton price as a whole. The mechanism analysis used is also insufficient. Therefore, this paper analyzed the internal and external influencing factors of mutton price in Xinjiang and investigated the fluctuation mechanism of influencing factors related to mutton price by combining the data decomposition method and correlation analysis.
The remainder of the paper is organized as follows.
Section 2 presents the analytical framework of the mechanism analysis.
Section 3 describes the data sources and reports the corresponding empirical results. Conclusions will be drawn in
Section 4.
4. Conclusions
By analyzing the relationship between different components and multiple influencing factors, this paper explained the fluctuation characteristics of mutton price in Xinjiang from a multi-scale perspective. Based on the multiple factors affecting the fluctuation of mutton price, this paper analyzed the price fluctuation of mutton sheep through the combination of data decomposition and correlation analysis. Three main conclusions can be drawn.
- (1)
Due to the fact that the world beef price, cottonseed oil price, beef price and labor cost have a great impact on the price component of mutton, changes in these indicators should be focused on in the future prediction of mutton price.
- (2)
The main driving factors affecting mutton price fluctuation include the world price of livestock products, the price of substitutes and the breeding cost of mutton sheep.
- (3)
World mutton prices in international livestock products and beef prices of substitutes have a positive impact on mutton price in Xinjiang, while fish prices of substitutes have a negative impact on mutton prices in Xinjiang. Interestingly, material and service costs and labor costs did not have a significant impact on mutton prices in Xinjiang.
From the main conclusions listed above, it can be found that the proposed univariate multi-scale analytical framework provides a feasible solution to illustrate the fluctuation mechanism of mutton price in the Xinjiang region of China. At the same time, these research findings can provide some policy guidelines and provide support to local government to adjust the mutton price fluctuation if these key driving factors are focused on in time.
However, how to combine the relevant mechanism analysis into an appropriate prediction model to improve the prediction accuracy of mutton price is a future research direction. In addition, among these influencing factors, whether they are long-term or short-term needs, further study is needed in the future.