Determinants of Market Prices of Cattle in Eastern Ethiopia

This study has attempted to identify determinants of cattle price per kilogram live weight using a log-linear regression model. The estimated model explains about 48% of the variation in market prices of cattle. Price per kilogram live weight of cattle increases with animal characteristics such as age, live weight and grade. Type of sellers, buyers' purposes, festivals, time of transaction and a time trend are also important variables in affecting cattle prices. Farmers tend to sell their animals at price discounts as compared to trader sellers. Cattle sellers suffer from price discounts in selling to buyers with business purposes in comparison to selling to ultimate consumers. Sellers tend to benefit from animal sales during festivals, as they tend to receive price premium compared to selling during non-festival periods. Cattle price per kilogram live weight increases with the time of transaction suggesting that sellers tend to obtain higher prices by selling at later hours of a market day. The policy implications of these empirical results are that efforts to benefit cattle producers and/or sellers need to pay attention to animal characteristics, sellers' type, buyers' purposes and festivals in preparing animals for market and/or during actual transactions. It is vitally essential to train cattle keepers on the above issues. Provision of reliable livestock market (price) information to market participants, and investment in different livestock marketing facilities (like weighing scale) and services need to be given due attention in order to avoid unrewarding cattle-pricing practices.

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 Record created 2017-04-01, last modified 2018-01-22

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