EghtesadOnline: Excessive production of livestock over the past few months, combined with significant decline in red meat consumption due to the coronavirus pandemic, have led to a massive surplus in the cattle farming sector, says the head of Iran’s Livestock Exporters National Assembly.
“Latest statistics show the domestic market normally needs around 60 million head of light livestock per year, but currently it is overflowing with 12 million above the average rate,” Mansour Pourian was also quoted as saying by IRNA on Sunday.
This has put farmers under immense pressure, making them face a wide range of challenges, including excessive costs, feed shortage and aging of cattle, he added.
The government banned livestock exports in the last Iranian year (ended March 19) to help increase supply in the domestic market. However, excessive imports amid a domestic production hike as well as the huge fall in consumption created the current problem.
With red meat consumption hovering around 900,000 tons and domestic production at 880,000 tons last year, more than 130,000 tons of red meat were imported into Iran during the period.
Calling on the government to lift the ban on exports, Pourian said “unconditional exports” will be the key in this critical situation to prevent any further losses.
In case the trend is not dealt with properly, Pourian said, thousands of farmers will go bankrupt and the country will face serious problems in the red meat market next year.
Ahmad Moqaddasi, the head of Cattle Farmers Association, said in April that there is a surplus of 200,000 beef cattle ready to head for Iran's industrial-scale slaughterhouses, but the decline in consumption due to the pandemic has hampered the process.
Substantial Rise in Red Meat Production
A total of 30,900 tons of red meat were produced in Iran during the month ending May 20 to register a 23% rise compared with the similar month of the year before.
The Statistical Center of Iran's latest report shows beef accounted for 17,200 tons or 55.7% of the overall production, indicating a year-on-year increase of 29%.
About 11,000 tons of lamb (up 17% YOY), 2,100 tons of goat meat (up 17% YOY) and 552 tons of meat from other types of livestock were produced during the month, accounting for 35.7%, 6.8% and 1.8% of the total output respectively, SCI reported on its website.
The output witnessed a 41% month-on-month growth.
Before the coronavirus, 90% of domestic demand for red meat were supplied domestically.
The top 10 red meat producing provinces in Iran are Khorasan Razavi, Fars, East Azarbaijan, Mazandaran, West Azarbaijan, Isfahan, Khuzestan, Tehran, Ardabil and Hamedan.
Imports are made from the Commonwealth of Independent States as well as from Brazil and Australia.
Former deputy agriculture minister, Hassan Rokni, has told Financial Tribune in an interview that Iran's red meat market is worth 248.793 trillion rials ($1.25 billion).
According to Karamali Qandali, the head of Nomadic Affairs Organization, Iranian nomads supply 25% of the country's demand for red meat.
Red meat production by nomads in Iran is estimated to increase by 15-20% in the current Iranian year (March 2020-21), compared with last year amid high precipitation leading to bountiful growth in meadows, the official said recently.
“At present, nomads own more than 9.5 million head of livestock and produce 190,000 tons of red meat per year, which meets 25% of domestic demand,” he was quoted as saying by Mehr News Agency.
There are 213,000 nomadic households in Iran accounting for 1.2 million of the country’s total population.
60% Decline in Consumption Over Coronavirus
Consumption of red meat has suffered a 60% decline following the outbreak of new coronavirus and shutdown of restaurants, ceremony halls among others, said the head of Iran’s Livestock Exporters National Assembly recently.
According to Pourian, restaurants, ceremony halls and hotels have the highest share in red meat consumption in Iran, especially during the Iranian New Year’s holidays.
These businesses have opened up lately, yet the comeback of the virus in a second wave is once again threatening their closure.
Cattle farms in Iran supplied 380,000 head of heavy livestock and 2 million tons of milk to the market last winter (Dec. 22, 2019-March 19), according to SCI.
There were a total of 4.5 million head of heavy livestock in Iran’s cattle farms in winter. A total of 537,000 calves were born in these farms over the same period, according to SCI.
A total of 15.5 million tons of livestock products were produced in the last Iranian year (March 2019-20), according to the deputy minister of agriculture in livestock affairs.
“Some 11 million tons of the total sum pertained to milk, part of which was exported. Close to 2.6 million tons of poultry meat, 1.02 million tons of eggs and more than 860,000 tons of red meat were produced during the period,” Morteza Rezaei was quoted as saying by ILNA.
The average Producer Price Index for industrial-scale livestock farms in the four-quarter period ending March 19 increased by 36.16% compared with the preceding year's corresponding period.
The PPI, using 2011 as the base year, stood at 500.17 in the fourth quarter of last Iranian year (Dec. 22, 2019-March 19), indicating a 1.3% decrease compared with the preceding quarter.
North Khorasan posted the sharpest deflation with 15.08% compared with the preceding quarter while Chaharmahal-Bakhtiari Province posted the highest quarter-on-quarter producer inflation with 6.14%, SCI reported.
The Q4 index registered an increase of 3.96% compared with the same quarter of the year before.
East Azarbaijan posted the sharpest year-on-year producer deflation of 7.85% while Kohgilouyeh-Boyerahmad Province registered the highest year-on-year producer inflation with 21.47% in Q1.