Prices of agricultural products and food and analysis of potato planting industry in China

1) Prices of food and edible agricultural products
The composite price index of agricultural products was 221 in April, a year-on-year growth of 11.42%, maintaining the high level for three successive months; the basket price index was 225, up 13.22% from the previous year, keeping the second highest level for three months in a row. The above two indexes both remained high, which drove the food consumer price index up to 6.1% in April, the highest level since April, 2016. The price index of fresh vegetables was up to 17.4%.
2) Price trends of potatoes and sales in the key wholesale markets
In April, the wholesale prices of potatoes were 2865yuan/ton, which is near all-time highs, increasing by 4.38% from the previous month and 19.53% year-on-year; the retail prices of potatoes were 4943yuan/ton, a month-on-month decline of 4.50% and a year-on-year growth of 17.50%.
The difference between wholesale prices and retail prices was 2078yuan/ton, which’s 72.52% of the wholesale price. In the month, the sales of potatoes in the key wholesale markets reached 236,000 tons, up 23.6% from the month earlier and 7.67% from the year before, and consumers’ purchasing volume continued rising for the decline of retail prices.
The sales amount of potatoes registered at 676 million yuan in the wholesale markets, increasing by 28.43% month-on-month and 27.34% year-on-year. Consumers’ terminal sales reached 1.167 billion yuan, rising by 18.07% from the previous month and 26.52% from the year before. The growths in sales volume and prices drove up the rebound of sales amount.
The annual average wholesale price was 2576yuan/ton, a year-on-year growth of 8.16%. Deducting the impact of currency value, the average price actually rose by 8.47% compared with the same period last year. The annual retail price averaged 4504yuan/ton, up 9.34%. Excluding the impact of currency value, the retail price actually increased by 10.04% year-on-year. The difference between the wholesale price and the retail price was 1928yuan/ton, up by 10.96% from the previous year, and the price difference ratio(price difference/wholesale price) rose to 74.82%, the highest level in recent three years. The sales amount of potatoes in the key wholesale markets was 5.7 billion yuan, a year-on-year increase of 2.67%, while the terminal sales reached 10.0 billion yuan, up 4.08% from the year before.
From January to April, 2019, the wholesale prices averaged 2738yuan/ton, rising by 12.01% compared with the same period last year. The average retail price was 5006yuan/ton, an increase of 13.21% from the year before. The difference between the retail price and the wholesale price was 2268yuan/ton, increasing by 14.69%.
The sales amount of potatoes in the key wholesale markets registered at 2.028 billion yuan in the first four months of 2019, a year-on-year growth of 0.62%; the total retail sales reached 3.69 billion yuan, up 2.46% year-on-year.
3) Cost and benefit of planting potatoes and its impact on employment
On the basis of above prices, it’s predicted that the farmers’ selling prices of potatoes were 1276yuan/ton in 2018, and will be 1429yuan/ton in 2019. The converted price of dried potatoes is 6250yuan/ton.
Per unit area yield of potatoes was 22.154ton/hectare(5026kg/hectare for dried potatoes), down 1.05% from the year before.
In 2018, the output value of potatoes was 28304yuan/hectare, the total cost registered at 22464yuan/hectare, and the profit was 5840yuan/hectare. The cost-profit ratio rose to 26.00% from the previous year. The decrease in per unit area yield and total production led to a  year-on-year growth of 36.38% in net profit.
From the perspective of cost structure, the cost of materials and services was 9438yuan/hectare, the labor cost was 9931yuan/hectare, and the land cost registered at 3076yuan/hectare. The operation cost reached 2104yuan/hectare, a year-on-year growth of 10.03%.
Comprehensively considering land, labor and profits, each person needs to plant 1.0 hectares and 3.37 hectares of potatoes to achieve the income levels of rural residents and urban residents; one household needs to operate 3.89 hectares of potatoes to reach the average income level of rural households.