Iran’s Poultry Industry Faces Dire Challenges Amid Rising Costs

Increasing financial losses for poultry farmers in Iran may trigger widespread bankruptcies and a significant shortage of chicken meat in the coming months, warns Mohammad Hossein Zamani Rad, head of the Khuzestan Poultry Farmers’ Union.

Deteriorating Financial Health

In an interview with IRNA, a local news outlet, Rad reported that the financial health of the Iranian poultry industry has dramatically worsened. “Losses suffered by poultry farmers have expanded in recent months, and many are facing bankruptcy,” he stated.

Last year, Iranian poultry farmers experienced a staggering combined loss of approximately IRR 250 trillion (US$5.9 billion). Government-imposed price controls have severely impacted the financial resources of poultry producers. “Farmers have been compelled to sell chicken below production costs, leading to a liquidity crisis,” Rad noted, cautioning that the industry may not survive much longer under these conditions.

Unrealistic Pricing and Rising Costs

The Ministry of Agricultural Jihad has set the retail price of broiler meat at 76,670 Iranian tomans (US$1.8) per kg, a figure that Rad deems unreasonably low given the nearly 50% rise in production costs over the past few months.

Impact of Currency Depreciation

Production costs are escalating primarily due to the depreciation of the Iranian currency, which has lost value against foreign currencies amidst ongoing economic challenges and geopolitical tensions. As Iranian poultry farmers are heavily dependent on imported soybeans and corn, fluctuations in the currency significantly burdens the industry.

“Poultry farmers are the only losers in this situation,” Rad emphasized, noting that government controls apply only to retail broiler prices while soybean and corn are traded at normal market rates.

In a desperate bid to mitigate losses, many farmers are likely to reduce hatchery fills in the coming months, raising the risk of a severe supply shortage.

Ongoing Challenges: Power Outages

The situation is exacerbated by frequent power outages, which further strain farmers. “Virtually every poultry farm in Iran is now equipped with a diesel engine, and any breakdown could lead to total production loss,” Rad pointed out. He noted that the Iranian poultry industry is now operating at only 30-40% of its capacity.

Conclusion

With looming financial crises and production challenges, the Iranian poultry industry faces significant hurdles ahead. Immediate actions are required to stabilize prices and support farmers, or the nation may confront a dire shortage of chicken meat in the near future.