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Lack of Feed Raw Materials Drives Iranian Poultry and Livestock Farmers to Bankruptcy

Source: Vladislav Vorotnikov for Feedinfo

22 October 2021 - As much as 20% of poultry farms in Iran have been shut down since the beginning of the year due to the lack of feed raw materials available and the government price regulation, said Reza Mobsari, secretary of the Iranian Poultry Producers Association.

"Out of 22,500 poultry farmers, only 18,000 units are still operating," Mobsari said.

Since the beginning of the COVID-19 pandemic, the Iranian government took feed production under full control, introducing a centralised purchasing and distributing of grain among feed mills and farmers. As explained by Mobsari, the state distribution system forced some farmers to cull their poultry population when feed was not delivered in time.

Poultry farms in remote districts have primarily become the victim of the current crisis.

"Some poultry farms are located on the outskirts of cities and villages, and for them, it was not economically feasible to continue investments," Mobsari said, adding that mandatory price regulation introduced by the government on the poultry market also took a heavy toll on business profitability.

The lack of feed raw materials is primarily attributed to the lack of exchange currency the Iranian government has been suffering due to the US sanctions.

Alhyar Valizadeh Vandchali, CEO of Mazandaran Livestock Industry Union, estimated that up to half of the livestock population in Iran could be slaughtered due to the lack of feed raw materials in the country.

"We currently have 50 million heads of cattle in the country, providing 70% of the red met supply in the domestic market. If the problem of feed shortages is not solved, 25 million could be slaughtered, which would be a national catastrophe," Vandchali said.

The livestock crisis could provoke a full-fledged social crisis in Iran, with as many as 50% of rural citizens currently having no other sources of income other than breeding farmed animals, Vandchali estimated.

Currently, farmers are desperate and trying to sell livestock at a price described to be "unimaginably low" of around 20,000 tomans ($4.7) per kg. Mass cattle slaughter is projected to drive beef production in Iran down in the next few years, he added.