Broiler Farming Risk Assessment: Market Risk Premium Measures and Marketing Strategies
The broiler farming business faces challenges due to many reasons such as technical innovation, finance uncertain parameters and dynamic marketing complex. Broiler farms at Sultanate of Oman has been performing with challenge and many constrains, including poor farming practices, climate stress and variability, feed grain price increase. The risk assessment of broiler business indicated high impact of products unit cost of productions, market dynamic risk and financial sustainability. Market competition and cheap frozen chicken products imported from outside significantly affect the local broiler market risk and uncertainty and marketing strategies. The study applied stochastic budget Monte Carlo Simulation approach to calculate market risk primum and reform market strategies and align them with acceptable risk tolerance comfort level of the stakeholders’ perceptions. Three production levels, products mix models, were tested under two different scenarios to measure market risk and market strategies. The study performed stochastic efficiency with respect to a function (SERF) to calculate certain equivalent (CE) figure to rank alternative market’s scenarios under uncertain situations. The overall results showed that unit cost, followed by broiler market risk and sale revenue volatilities, are highly affecting profit in integrated complex system.
