Optimal Locations for building new capacities in broiler mean production with the aim of reducing transportation costs in the production networks and distribution of chicken meat to the market

Document Type : Research Paper

Authors

Department of Agricultural Economics, Faculty of Agricultural Economics and Development, University of Tehran, Karaj, Iran

Abstract

Chicken meat is an important source of protein supply in the household food basket. Therefore, planning for timely and adequate supply of this food product is very necessary and important. However, building new production capacity is a time-consuming investment that should be undertaken gradually based on the prediction of demand over time. The purpose of this study is to determine the appropriate locations for building new broiler farms to meet the demand for this product in the horizon 1415 with the aim of minimizing transportation costs in the chicken meat production and distribution network. To meet this aim, the new poultry farms have to be located in places where the meat demand in each city can be supplied from the nearest slaughterhouse and the live chicken produced by the poultry farms can be sent to the nearest slaughterhouse, using a transportation mathematical programming framework. Results of this study indicate that, to meet the demand for chicken meat in the horizon of 1415, it is necessary to create a new capacity for growing 113 million one day chicks in the country. Based on the result of this study, to complete the chicken meat production chain and minimize transportation costs in the chain, the new capacities should be distributed over 22 cities in 6 provinces, including, Khuzestan Razavi, Sistan and Baluchestan, Fars, Kerman, Kohkiluyeh and Boyer-Ahmad, And Hormozgan provinces.  These results provide good guidance for the policy makers and planners in developing new chicken mean production capacities in Iran. Also, the locations specified by this study, as the best places for building new capacities, can be used by financial institutions in financing poultry farms investment in the country. Thus, it is worth considering the results of this study by both policy makers and financial institution.

Keywords

Main Subjects

Extended Abstract

Introduction

Chicken meat is an important source of protein supply in the household food basket. Therefore, planning for timely and adequate supply of this food product is very necessary and important. The projected demand for chicken meat in the horizon of 1415, revealed that a new capacity for growing 113 million one-day chicks has to be created all over the country. The purpose of this study is to determine the appropriate locations for building new broiler farms to meet the demand for this product in the horizon 1415 with the aim of minimizing transportation costs in the chicken meat production and distribution network.

 

 

Methodology

Building new production capacity is a time-consuming investment that should be undertaken gradually based on the prediction of demand over time. To reach the already mentioned aim, these new poultry farms have to be located in places where the meat demand in each city can be supplied from the nearest slaughterhouse and the chicken grown by the poultry farms can be sent to the nearest slaughterhouse. However, the existing farms and slaughterhouses are the main constraint in locating the new farms that satisfy the cost minimization objective. Thus, we are facing a constraint cost minimization problem which can appropriately be solved by transportation mathematical programming methodology, using data on transportation cost per kilometres, distances among poultry farms and slaughterhouses, capacities of poultry farms and slaughterhouses, and projected demand for poultry meat products in different cities of Iran.

 

Results and discussion

Results of this study indicate that, to meet the demand for chicken meat in the horizon of 1415, it is necessary to create a new capacity for growing 113 million one day chicks all over the country. Based on the result of this study, to complete the chicken meat production chain and minimize transportation costs in the chain, the new capacities should be distributed over 22 cities in 6 provinces, including, Khuzestan Razavi, Sistan and Baluchestan, Fars, Kerman, Kohkiluyeh and Boyer-Ahmad, And Hormozgan provinces. The complete list of all 22 cities are presented in table 2. In the paper.  

 

Conclusion and suggestions

Results provided by this study are good guidance for the policy makers and planners in developing new chicken meat production capacities in Iran. The investors also can be benefited from these results, as the most appropriate places were specified in this study. In addition, the locations specified by this study, as the best places for building new capacities, can be used by financial institutions in financing poultry farms investment in the country. Thus, it is worth considering the results of this study by policy makers, investors and financial institutions.

References

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Iranian Journal of Agricultural Economics and Development Research
Volume 54, Issue 1
March 2023
Pages 305-316

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