Depending on imported raw materials, animal feed’s price skyrocket

The increase in the price of animal feed has caused many difficulties for poultry farmers. Photo: N.Thanh

Meat prices go down, feed prices go up

According to the Department of Livestock Production (Ministry of Agriculture and Rural Development), in the first six months of 2021, the price of live pigs for slaughter at the farm followed a downward trend from April to May. Currently, prices are fluctuating from VND 62,000 to 69,000/kg in the North, from VND 63,000 to 70,000/kg in the central region and from VND 61,000 to 68,000/kg in the south.

While pig prices tend to decrease, feed prices continue to rise. Tong Xuan Chinh, Deputy Director of the Department of Livestock Production, said with the price of breeding pigs from VND 2.5 to 3.5 million/head, along with the high price of feed, the decrease in selling price made small farmers struggle to profit or even face losses. Meanwhile, for livestock farming, the value chain from seed, feed, and slaughter to market distribution still gets profit.

"Although this difficulty is only temporary, it will affect the breeding process and slow down efforts to restore the pig herd," Chinh said.

Regarding the poultry industry, Nguyen Thanh Son, Chairman of the Vietnam Poultry Breeding Association, said livestock firms have never encountered such difficulties as they are facing now and the two big crises: the impact of the Covid-19 pandemic and the market crisis.

“For a year now, poultry prices have always been below cost. The survey shows the average price of many items in June 2021 has decreased by 20-30% compared to the same period in 2020. At present, the price of some poultry products is on an upward trend. However, this increase has not been enough to offset the increase in input costs, especially feed costs. The re-herding of livestock households and businesses is in moderation because the price of feed is rising too high, the price of products sold cannot compensate for input costs," said Son.

Need for a raw material development strategy

As for why the price of feed has increased since October 2020, many say that it is mainly due to the sharp increase in the price of imported feed materials.

Duong Tat Thang, acting director of the Department of Livestock Production, said the prices of cereals on the world market have increased due to high production costs. In addition, climate change affects crops and large investment funds turn to agricultural speculation and China increases the purchase of cereals for domestic production and animal husbandry. In addition, the impact of the Covid-19 pandemic caused transportation costs to increase due to the lack of ships and containers for transporting goods in general, including feed products (average transportation costs increased by 200-300% compared to the previous year).

Son said most of Vietnam's feed production materials must be imported from abroad. In 2020, the whole country imported 20.4 million tonnes of feed materials with a value of US$6 billion. In which, many raw materials must be imported 80-90%. This leads to the situation when the world's raw material prices fluctuate due to crop failure, area reduction or supply chain disruption, Vietnam's feed prices skyrocket.

The prices of main feed ingredients may increase in near future due to information on the inventory of the old crop and the planting area of ​​corn and soybeans in the new crop of the US are lower than expected. At the same time, the demand for corn for ethanol production has increased in the US, leading to a limit ed supply of corn for feeding.

“The domestic price of finished feed products may continue to increase in the next time. In the last six months of the year, nurturing will be difficult," said Tong Xuan Chinh.

“There is a lack of a strategy for sustainable development of feed materials. Although occupying the first and second position in Southeast Asia, in fact, Vietnam's livestock industry is the processing industry, ’eating‘ raw materials of the world. Therefore, we recommend that there should be a strategy to develop feed materials, to avoid dependence on imports as at present," said Son.

Chinh said the Department of Livestock Production will continue to monitor to have more appropriate and realistic directions and forecasts for the feed material market, pork and poultry market to help farmers. Along with that, the shift to raising grass-fed cattle such as cows, buffaloes, rabbits, goats and promoting the cultivation of feed materials such as biomass corn are also important orientations for farmers.