Broiler Farming Risk and Stress Management Strategies

The broiler farming sector in tropical area suffer from high temperature and humidity stress and reduced daily bird growth rate. Small scale broiler farms at Sultanate of Oman has been performing poorly due to many constrains, including poor poultry farming practices, climate condition variability, feed grain price increase. The import of frozen poultry with cheap price and feed cost increased after Ukraine conflict and global food security issue significantly affect broiler cost of production and farming economic sustainability. Poultry feeding cost increased by 36% compared to last year due to corn and soybean grain price increased and exposed farmers to high risk and income uncertainties and jeopardize food security sustainability. The study applied Monte Carlo Simulation approach to assess risk management strategies and economic sustainability of three production level, products mix alternative under deferent market constrains. The broiler products mix and marketing constrains were examined considering different risk preference and ARAC of decisions makers. The stress analysis performed to test economic performance of alternative production strategies and identify factors affect broiler farming continuity and resilience. The overall results showed that broiler marketing risk and sale revenue volatilities is a highly uncertain and dynamically integrated complex system. Sale incentive policy need to be addressed and controlled through appropriate risk assessment and mitigation strategies and optimization production operation and control cost increase through vulnerability assessment. The net profit (baseline) scenarios with right production level and products mix following profitable market channels is more risk-efficient and sustainable compared to products mix with over supply production and without fast marketing access support channels. The study performed stochastic efficiency with respect to a function (SERF) and calculate Certain equivalent (CE) figure to rank alternative stress management strategies under stress situation. Stress management analysis showed that demand for parts and fresh products with sale revenue decline are risk averse and has highest CE figures followed by (cost frozen) products at all ARAC. The risk premium and willingness to pay analysis showed that (cost parts) products has highest risk premium figures followed by (cost fresh) and (demand frozen) products compared to baseline. The risk of cost increase needs to be monitored and controlled to avoid inside organization risk vulnerability. Risk premium (RP) needed to change from (cost fresh) to (cost frozen) products is RO 67,553 for risk neutral absolute risk aversion coefficient (ARAC). The study showed risk premium (RP) need to be paid to motivate a change from (demand frozen) alternative to (demand fresh) products activities is RO 24,928 and to change from (demand frozen) to (demand parts) is RO 64,379 for risk neutral absolute risk aversion coefficient (ARAC). Marketing incentive programs and regulating market are needed to understand broiler business risk and avoid significant loss due to sale delay and improve risk mitigation programs and imposed anti-dumping and countervailing duties on broiler products import. The risk of feed cost increase needs to be monitored and subsidized by Government to mitigate broiler farming risk and maintain business sustainability.