The livestock market in Azerbaijan is grappling with a host of difficulties, as breeders find themselves on the losing end while butchers enjoy profitability. The underlying issue, according to experts, appears to be the lack of competition in the industry.
Recent months have proven financially challenging for livestock breeders in Azerbaijan. One breeder shared his story of purchasing 37 lambs at 210 AZN each three months ago. Despite the investment of time and resources in tending to the animals, he was compelled to sell them at a significantly reduced price, between 240 and 250 AZN each, well below the expected range of 300-320 AZN.
Expenses associated with raising the livestock, including the costs of hay, feed, transportation to the market, medications, veterinary fees, and various market-related expenses, amounted to a substantial loss of 2,300 AZN. Such hardships are becoming increasingly prevalent among the country’s livestock breeders.
Elmeddin Ibayev, a resident of Azerbaijan’s Barda region, revealed that for the past month, livestock markets in Barda and surrounding regions have witnessed a state of stagnation. Both buyers and sellers share dissatisfaction with the prevailing market conditions. While there hasn’t been a noticeable change in meat prices, live animal prices have experienced a significant decline.
The price reduction varies from 50-100 AZN for hornless animals and 150-200 AZN for horned ones. Presently, mutton in Barda is priced at 12-13 AZN, while lamb and sheep meat costs between 16-17 AZN.
Butchers Thrive, Breeders Suffer
In stark contrast, butchers appear content, while livestock breeders bear the brunt of plummeting prices. Butchers purchase sheep and lamb at lower rates, typically around 12-13 manats per head, then sell the meat for a profit of around 16-17 AZN. The situation isn’t much different for beef and cattle, with prices ranging from 10-11 AZN per kilogram for livestock breeders, compared to 12-13 AZN when sold.
As a result, breeders find it increasingly difficult to maintain their livestock. The cost of feed and hay, combined with the low selling prices, has left them struggling financially, with a general sense of disappointment prevailing among this group.
Pedigree Animals and Live Animal Disparities
Interestingly, it’s worth noting that the price reductions predominantly affect live animals rather than milk-producing animals. Some breeders have noted an increase in the price of pedigree milk-producing animals.
“There’s an increase in the price of pedigree animals. A local cow that was priced at 1,700 manats a month ago is now 2,200 AZN. Pedigree milk-producing animals are priced between 3,500 and 4,200 AZN,” says a buyer.
Challenges for Breeders in Kurdamir
The Kurdamir region, known for its extensive livestock and grazing areas, also faces challenges in the current market conditions. Beef and goat meat in the region are priced at approximately 15-16 manats, while lamb meat costs around 17-18 AZN. Breeders in the region have noticed that the prices of live animals in livestock markets have dropped by 2-3 manats per kilogram.
One of the local cattle owners attributes this price reduction to a monopoly in the markets and slaughterhouses in the region. He laments, “In our case, they want to sell it for 250-300 manats cheaper than the purchase price”.
State Statistics Reveal Livestock Challenges
Data from the State Statistical Committee paints a grim picture, revealing a decline in the number of livestock in the country. The number of cattle has decreased by 4.3%, equivalent to 113,000 head, while sheep numbers have dropped by 8.9%, totaling 705,000 head.
The Ministry of Agriculture has clarified that market participants, not the ministry, determine prices. While the Ministry oversees subsidies for agricultural products, other organizations manage import and export processes.
Industry Expert Perspective
Economist Natiq Jafarli suggests that the rising prices of livestock products have been ongoing since 2014. He explains this increase as the result of changes in the cultivation of feed crops and grazing lands due to cotton production.
Jafarli further notes that the increasing price of feed has impacted meat production costs. Importantly, the rise in prices is primarily driven by inflation.
Market Stagnation and Calls for Reform
The stagnation in the livestock market has prompted some to call for reforms. Analysts argue that the government should foster a more competitive environment and end the monopoly currently affecting the market.
Natiq Jafarli stresses the need for reforms, asserting that “The function and duty of the state are to create a fair and competitive market environment”.
Jafarli emphasizes that the key factor affecting market conditions is the purchasing power of consumers. The decline in demand has led to falling prices, but breeders and butchers are also grappling with the consequences of the market dynamics.
The meat market’s complex interplay requires a more balanced approach. While breeders feel the financial strain, butchers work within market logic to maintain their profit margins.
In summary, the challenges in Azerbaijan’s livestock market have exposed disparities between breeders and butchers, ultimately affecting the prices of live animals and meat products. Industry experts and breeders alike call for a more competitive and equitable market environment, while consumers may continue to see fluctuations in meat prices depending on supply and demand dynamics.