Market Price Determinants of Live Cattle: the Case of Garissa Livestock Market

Abstract

Livestock in general and cattle in particular are indispensable components of rural livelihoods in Kenya. In the semi-arid and arid parts of the country, the pastoral communities depend mainly on their livestock for their livelihoods. This study examined the factors that influence the prices of live cattle in the major regional livestock market in Garissa, North Eastern Province. The main objectives of the paper are to examine market price determinants of live cattle, establish the relationship between the market prices and the factors that influence them, and further recommend policy measures to enhance the performance of the livestock sub-sector particularly on marketing and prices. A hedonic pricing model was fitted to examine the determinants of observed live cattle prices. Transaction data from the records of Kenya Livestock Marketing Council on average monthly prices, age, sex, grade/body condition and season were used. The empirical results indicate that the significant variables in explaining the average market price of the cattle are: gender; both male and female, age of the cattle; both mature and young, the body condition of the cattle and the season in which the transaction happens. From the results, it’s evident that cattle possessing characteristics of males and mature positively shock the average market price while cattle possessing characteristics of female, young and thin negatively shock the average market price. The weather condition definitely has negative impact on the average prices. With the area under study often faced with long dry spells, this leads to a down side change in the market prices. This is in conformity with the reality. Policy and institutional approaches to improve the livestock sub-sector on a number of fronts to ease the major constraints that tend to dampen the performance of livestock sub-sector in the Arid and Semi-Arid Lands, even in the face of favourable prices, are discussed in this paper.