Chicken Farmers Suffering Losses Due to Cost-Price Gap

EghtesadOnline: Chicken farmers incur losses of 90 to 100 billion rials ($360,000-$400,000) per day due to the difference in production cost and the price set by the government.

News ID: ۷۵۱۵۹۸

29 November 2020

According to Nasser Nabipour, the head of Tehran’s Egg-Laying Chicken Producers Union, the production cost of eggs tops 150,000 rials (60 cents) per kilogram whereas the price set for selling them is 120,000 rials (48 cents).

“The 30,000-rial (12 cents) gap causes losses of 90 to 100 billion rials for chicken farmers every day,” he was quoted as saying by ISNA.

“Chicken farmers have to wait 10-50 days to receive their animal feed quotas at subsidized rate. They are forced to procure their poultry feed at free market rates and those who fail to provide feed have to send their chickens to the slaughterhouse.”

On the prices of poultry and livestock feed, Nabipour said, “Prices are rising constantly. For example, soybean prices have now reached 160,000 rials (64 cents) and corn prices exceed 44,000 rials (17 cents) per kilogram.

Decline in Feed Imports

The import of livestock and poultry feed saw a 10% decline in weight and an 18% decrease in value to reach 8.52 million tons worth $2.37 billion in the seven months to Oct. 21, the news outlet of Iran Feed Grain Importers Union reported.

A total of 5.84 million tons of corns worth $1.41 billion were imported over the period, indicating a 20% and 17% rise in weight and value year-on-year.

Iran imported 1.09 million tons of barley worth $268.27 million during the seven-month period, which registers a 40% and 44% decline in weight and value compared with the corresponding period of the year before.

Imports of soybean meal stood at 632,150 tons worth $258.77 million during the period under review. The figures show a year-on-year decrease of 44% and 48% in weight and value, respectively.

Seven-month imports of soybeans stood at 949,840 tons worth $437.75 million, posting a decline of 44% in weight and 40% in value YOY.

Number of Importers Dwindles

The number of importers of livestock and poultry feed raw materials dwindled by 70% in the first half of the current year (March 20-Sept. 21).

According to Abolhassan Khalili, the head of Livestock and Poultry Feed Importers Union, there were 403 companies engaged in the import of livestock and poultry feed during the first half of the last Iranian year, which number has now fallen to 111 and counting.

“Unlike what most officials assume, money transfer is a much bigger problem than the amount of foreign currency allocated by the government. The transfer of foreign currencies other than the South Korean won, the Omani rial, the Iraqi dinar and the Pakistani rupee creates multiple challenges for importers. The decline in the import of 56% of unprocessed vegetable oil, 60% soybean meals, 23% barley and 35% of oilseeds from March 20 to Sept. 11, compared with the corresponding period of last year, is indicative of the problems in the way of imports,” he was quoted as saying by IRIB News recently.

The shortage of poultry feed has become a growing problem, putting the entire poultry industry at risk.

According to Gholamali Fareqi, the head of Day-Old Chicken Producers Association, only broiler chicken farms have suffered losses amounting to 20 trillion rials ($67 million) over the past six months.

Shortages of animal feed (corn and soybean meal) are expected to work their way through the prices of chicken and eggs in the coming months. This year’s (March 2020-21) imports of animal feed plunged by almost half of last year’s volume, due to the rising value of US dollar and the depreciation of local currency.