The impacts of price and output uncertainty on chicken and beef meats in Fars Province

At this study, productions of chicken and beef meats were investigated based on the method of Moavia Alghalith, considering simultaneous uncertainty of price and output in the Fars province. This method is applicable for direct and indirect utility functions and does not require specification and estimation of the production function. The estimating equations for two most common forms of output risk (additive and multiplicative risks) were derived and the results empirically were compared. Needed data, including monthly amounts of chicken and beef meat and also price of essential inputs related to these outputs for the years 2001 to 2006, were collected. Results show that, by increasing risk on price and output, chicken production will decrease, considering two forms of output risk. Based on the multiplicative form, beef meat production decreases by increasing price and output risk in the whole periods of study; where as applying additive form represents decreasing and increasing production in different years. Besides amounts of chicken meat reduced by increasing price of chicken meat based on two forms of output risk. In fact, increasing price and output risk of chicken meat not only omitted the positive effect of price increase on incentives of output expansion, but also decreased output in some cases. Amounts of beef meat production have increased by increasing price of beef meat, based on two forms of output risks and are consistent with theory. To reduce price and production risks, providing the necessary context for preparation of pricing contracts for sales of beef and chicken meats and purchasing basic inputs for these products during production and before the decision to produce, through insurer companies are advised. Also training cattle and poultry cooperatives members for marketing activities in this field and regulating the market of these products can be useful. On the other hand, government should avoid from unplanned import that increases the risk for producers.