Livestock dynamics under changing economy and climate in Mongolia

Abstract Livestock is a key variable in understanding the complex relationships of coupled natural and human systems for pastoralist societies. We used a Two-Stage Dynamic Model to examine the dynamics of livestock in terms of sales, self-consumption, and stocking in Mongolia in recent decades. While Mongolian pastoralists remain largely in the subsistence economy stage, herders do respond to market factors such as current and expected prices, substitute food prices and debt to help guide their choices and behaviors to maximize the economic value of their livestock. Our results also find that the livestock is very vulnerable to natural disasters. Providing a better capital market and livestock market could be the most essential factor to facilitate the economic transition of Mongolia from a subsistence pastoral economy to a market economy and to increase the welfare of herders in Mongolia. Improved public supports, including climate-based livestock insurance, enhancement of infrastructure animal shelter, better capital markets, increased availability of weather information, and improved winter protection, are critical components to a sustainable level of livestock production.