![]() Relative to previous studies in Ethiopia and elsewhere in developing countries, we believe this study has two important strengths. Ward et al., 1996), published literature on these issues in developing countries is extremely limited. lowland agropastoral), animal traction conditions, and income growth.Īlthough there is a longstanding literature using variants of hedonic price models to examine determinants of price formation or discovery 1 in live cattle markets in the developed world, particularly the large US markets (Avent et al., 2004 Buccola, 1980 Coatney et al., 1996 Dhuyvetter et al., 1996 Fausti & Feuz, 1995 Jones et al., 1992 Mintert et al., 2016 Mitchell et al., 2018 Poss et al., 2021 Tomek, 1980 C. We first document patterns and trends in the prices of different types of cattle before using a hedonic price formation model to assess the predictors of cattle price formation, including drivers of secular price dynamics and price changes due to seasonality, a range of interacting animal characteristics, and a range of agroclimatic spatial and temporal factors such as rainfall, production system (highland vs. To do so we use a rather unique dataset covering the prices of different types of cattle in 39 wholesale markets over 2006–2015. The objective of this study is to understand the formation and evolution of cattle prices over space and time. Cattle is therefore important in Ethiopia's agricultural and food economy, as well for addressing the country's significant burden of undernutrition. Income elasticities for beef are also very high in Ethiopia (Tafere et al., 2011), suggesting a strong potential for future growth. Moreover, beef is the largest source of animal-based protein in Ethiopia and easily the largest component of total livestock expenditures, accounting for around 38% of rural livestock expenditures and 56% of urban expenditures. Despite the importance of livestock products for lower income populations, the functioning of livestock markets in lower income settings is very poorly understood.Įthiopia, the subject of this study, has the largest cattle herd in Africa-the fifth largest in the world (FAO, 2017)-and around 80% of rural households own cattle over 2006/07–2015/16 (CSA, 2007a-2016a). ![]() ![]() However, ASF consumption in these settings is highly constrained by high prices of livestock products (Headey & Alderman, 2019), especially in rural Ethiopia (Headey et al., 2019). On the consumer side, consumption of animal sourced foods (ASFs) has been strongly linked to improved nutritional outcomes in lower income settings (e.g., Dror & Allen, 2011 Headey et al., 2018). On the producer side, livestock is often a sizable source of income for rural households, but also important as an agricultural and financial asset serving multiple roles as a source of power for crop cultivation (traction) and transport, and as a form of savings and a source of cash income in distress situations. The functioning of livestock markets in developing countries is important because markets determine the prices and profits received by livestock producers and traders, as well as the retail prices paid by consumers. The analyses help inform the systemic challenges that Ethiopia will need to overcome to meet rising demand for beef products in the face of sustained income and population growth, as well as the adverse effects of climate change. However, the implied effects of these factors are often significantly different in highland mixed crop-livestock areas compared to agro-pastoralist lowland areas, emphasizing the dualistic nature of cattle markets in Ethiopia. We show that cattle prices are influenced by a wide range of factors, including proxies for meat quality, religious fasting practices, climate-based seasonality but also climate shocks and availability of grazing land, competition from animal traction services, and rising consumer incomes. This study analyzes wholesale cattle markets in Ethiopia using a uniquely rich large-scale dataset covering both prices and cattle characteristics in 39 markets (in both highland and lowland areas) over a 10-year period, and hedonic regression models structured to understand both cattle price formation and seasonal and secular price dynamics. Despite their importance, the functioning of livestock markets in lower-income countries is poorly understood and rarely studied compared to more developed countries. Livestock markets influence income generation for producers, but also accessibility and affordability of highly nutritious animal-sourced foods for consumers.
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