Managing Import Risk in Livestock and Poultry Feed Supply: A Portfolio Approach

Sadid Rudani, AmirSattar; Fathi, Fatemeh

Managing Import Risk in Livestock and Poultry Feed Supply: A Portfolio Approach

Articles in Press

Document Type : Original Article

Authors

AmirSattar Sadid Rudani

Fatemeh Fathi

Department of Agricultural Economics, School of Agriculture, Shiraz University, Shiraz, Islamic Republic of Iran.

Abstract

Iran depends heavily on imports of livestock and poultry feed, making domestic food production vulnerable to disruptions in international markets. Maize, soybean meal, and barley were selected because they account for approximately 80% of Iran’s feed imports during the study period. This study applies Portfolio Theory to decompose import portfolio risk into systematic and specific components. Systematic risk was estimated using OLS regression between Iran’s import prices and world prices, while specific risk was calculated from residual variance adjusted by partner-specific risk profiles derived from the International Country Risk Guide (ICRG). An additional OLS model was estimated to identify the determinants of specific risk, including import concentration measured by the Herfindahl–Hirschman Index (HHI), exchange rate movements, oil revenues, economic complexity, and domestic livestock production. The results show that systematic risk follows global price volatility, whereas specific risk is the main source of portfolio vulnerability. Among the selected commodities, maize exhibits the highest import risk due to its larger import volume and higher residual variance. The specific risk index reached its lowest level in 2020, reflecting a more balanced distribution of imports among major producers and relatively low-risk suppliers. Higher import concentration and exchange rate depreciation significantly increase specific risk, whereas higher oil revenues reduce it. The findings suggest that import policies should move beyond simple supplier expansion toward risk-aware diversification and a more balanced distribution of import shares across trading partners to enhance feed supply resilience and national food security.

Keywords

Import

Livestock

Portfolio

Poultry

Specific risk

Systematic risk

Subjects

Agricultural Economics/Agriculture Marketing and Supply Chains

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