Feed price rises trouble farmers

Since early this year, animal feed prices have increased by up to 50 per cent, causing Vietnamese farmers much difficulty, according to the Livestock Production Department of the Ministry of Agriculture and Rural Development.

Local feed producers recently announced an increase in feed prices from VND150 to VND250 per kg. The price for raw materials used in animal feed production has risen faster than the proportion of livestock product prices, reducing scale and economic efficiency.

Farmers on the outskirts of Ha Noi have said that feed prices have risen from VND11,000 to VND13,000 per kg, a 30 to 50 per cent year-on-year increase. The 52S brand of animal feed, produced by the CP Animal Feed JSC has fetched prices of between VND220,000 and VND310,000 per 25 kg.

Le Phan Minh Nguyet, like many other breeders in central Thanh Hoa Province’s Hoang Hoa District said that feed prices had never increased by such an extent as recently observed. Raising a 75 kg pig costs around VND5 million on average, making pig prices go up sharply in recent months by 10 to 40 per cent. But these higher prices failed to catch up with the price of feed which, together with that of medicines, rose by 20 to 50 per cent.

Alongside animal feed, the husbandry sector has been experiencing difficulties of its own, including disease, due to bad weather, high interest rates and increased costs of electricity, water, labour and medicine, without an increase in production.

Tien Dung, the owner of a livestock farm in the Ung Hoa District of Ha Noi said that, having raised 4,000 chickens, he had to spend around VND150 million (US$7,300) on animal feed per month, an increase of VND30 million ($1,500) since the start of the year.

Dung added that, if animal feed prices continued to rise, he would consider changing business in order to avoid further risks.

According to the Viet Nam Animal Feed Association, domestic producers refrained from increasing their prices in order to keep up with market prices. If prices were allowed to increase too quickly, breeders would not be able to afford to continue doing business, which could mean that feed producers would have no market in which to operate.

While Viet Nam has been viewed as a country with great agricultural potential, its animal feed sector has experienced periodic shortages of raw materials, 50 per cent of which is imported from abroad, causing local resource wastage and instability due to volatile exchange rates.

Hoang Kim Giao, head of the Livestock Production Department, said that, due to the rapid growth of the breeding industry, the animal feed sector had experienced a 15 to 17 per cent growth of its own, which has led to raw material resources not being able to meet local demand. By 2020, Viet Nam is expected to need around 15 million tonnes of animal feed a year to placate domestic demand.

Many animal feed producers have been restructuring, cutting costs and co-operating with related stockholders in order to cope with the current situation. Feed producer GreenFeed has confirmed that it will be applying a multi-module integrated system to help it manage its resources more effectively. According to a company representative, farmer support will play an essential part in sustainable development.

The Viet Nam Animal Feed Association also confirmed that producing a suitable volume of quality raw material is also important, seeing as this was a current weak point in the system.

The association has proposed the redistribution of land and investment planning in the production of raw materials for the animal feed industry, which would also need more attention from ministries in terms of taxes and administrative policies affecting stabilised prices.

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