Livestock, including buffaloes and cows in the country have decreased slightly, about 5-7 per cent over the same period in 2011. Although there have been recent challenges in the health and thus number of pigs in the country, the comparison with the same period in 2011, sees the country's pig population has increased by about 1 to 1.3 per cent.

Poultry has increased from 5.5 - 6 per cent over the same period as well. Poultry had been affected by avian influenza (AI) in March and April. However, because of the high flock increase at the end of last year and because there has been better control of AI this year, then the overall flock has increased. Compared to early 2012, poultry prices have decreased from about 20 per cent up to a sharp decrease from 38-40 per cent. This will also cause the farmers to produce in moderation and should see a rapid reduction in total numbers mainly due to lack of capital and because of low economic efficiency.

Pork meat production as compared to total meat production represents about 73 per cent of the total meat produced in the first seven months.

Pig production during the first seven months of 2012 was quite difficult, due to disease challenges and increasing cost of production. Because of the use of banned substances to promote lean growth in pigs (substances such as clenbuterol) this, in turn, caused the consumers to change from pork consumption to the other meats and seafood.

Both consumption and pig prices decreased rapidly. The lending institutions have shown reluctance in working with swine farmers and thus capital loans and operating loans are quite difficult for swine farmers to secure.

According to a recent survey of the GSO (June 2012), the total number of pigs in the country was 26.7 million, up 1.5 per cent over the same period in 2011.

In July and in the North part of the country, the price of market pigs ranged from 37,000 to 42,000 VND/kg ($1.77 US/kg to $ 2.01US/kg) while in the South, the average selling price for market pigs ranged from 32,000 VND/kg ($1.53 US/kg) to 38,000 VND/kg ( $ 1.82 US/kg).

In July, the price of some animal feed ingredients increased from June: dry cassava 5,565 VND/kg ($0.267 US/kg) (up 6.0 per cent) and soybean meal 15,603 VND/kg ($0.748 US/kg) (up 15.2 per cent), Prices of some raw materials decreased slightly: corn 7,035 VND/kg ($ 0.337 US/kg) (down 2.9 per cent); rice bran 6,720 VND/kg ($0.335US/kg) (down 3.5 per cent) lysine 46,200 VND/kg ($2.22 US/kg) (down 4.0 per cent) and methionine 99,750 VND/kg ($4.78 US/kg) (down 6.9 per cent). Complete mixed feed for pigs from 60 kg to market weight was 9,260 VND/kg ($0.444 US/kg). This is down from 9336 VND/kg ($0.448 US/kg) for last month.

-In 2011, Viet Nam imported over 8.9 million tonnes of feed ingredients valued at $3.7 million US. According to Le Ba Lich, the president of Viet Nam Animal Feeds Association, the imports accounted for more than 62 per cent of the inputs for feed production (total in Viet Nam was 14.3 million tonnes of livestock feed manufactured). He said that 4.8 million tonnes were protein sources including soybean meal and meat and bone meal and 3.8 million tonnes were energy sources including corn, rice bran and wheat. In 2011, Viet Nam produced 0.87 million tonnes of corn, 0.57 million tonnes of rice bran and 2.3 million tonnes of wheat. The recent drought in the US will have a huge impact on feed prices in Viet Nam, since imports account for 62 per cent of the total livestock feed consumed in Viet Nam.

As reported by the General Statistics Office, the consumer price index (CPI) in July for the country declined 0.29 per cent over the previous month. After 38 consecutive months of increases, both June and July have shown declines. As compared with same month last year, CPI rose by only 5.35 per cent, very close to the inflation expectations of the year according to government officials. Generally, the first 7 months of 2012, CPI increased by 11.20 per cent over the same period in 2011. There were abundant food items and food supplies and this commodity group price indices continued to fall making food and food services decrease by 0.47 per cent.

August 2012

Livestock production in August continues to show many difficulties due to the continuation of the epidemic disease (PRRS); the influence of the state of using banned substances in animal (clenbuterol) shifts the consumers away from pork and thus overall consumption is reduced; all prices of pork, chicken and eggs have continued to decline and this affects the larger operations cash flow; livestock farmers are reassessing their business plans-some are shutting down their operations and banks are reluctant to lend capital and operating funds. According to estimates of the Department of Livestock, meat production in August was estimated at 275 - 290 thousand tons of meat (about 25 thousand tons less compared with the previous month).

In August and in the North part of the country, the price of market pigs ranged from 35,500 to 41,000 VND/kg ($1.70 US/kg to $ 1.97US/kg) while in the South, the average selling price for market pigs was about 35,750 VND/kg ($1.71 US/kg). For interest, poultry meat (white portions) is now around 19,000 to 25,000 VND/ kg ($ 0.91 to $1.20US/kg) down 15.4 per cent from July.

In August, most feed ingredients showed a rapid increase. The price of most animal feed ingredients increased from July especially rice bran 7,245 VND/kg ($0.347US/kg) (up 7.8 per cent). There is anticipation that the feed ingredients will rapidly rise in the last portion of this year.

Complete mixed feed for pigs from 60 kg to market weight was 9,429 VND/kg ($0.452 US/kg). This is up from 9260 VND/kg ($0.444 US/kg) for last month.

The demand of the livestock sector on the import of animal feed and raw materials continued to decline in August. According to estimates by the General Statistics Office, wheat imports in August is estimated at 120 thousand tons, valued at $36 million USD, down about 38 per cent from the previous month. The import value of animal feed and raw materials for the year has dropped by 17.8 percent to a total of about $180 million USD. (Viet Nam spent USD 1.29 billion on imports of animal feed and materials in the first seven months of this year-less by 5.5 per cent against the same period in 2011).

After two months of consecutive decline, the August consumer price index increased by 0.63 per cent from the previous month, mainly caused by the impact of the three recent petrol price increases (on the 20/7, 01/8 and 13/8) with a total per liter increase of 2400 VND/liter ($0.115US/liter) for gasoline and 1650 VND/liter ($0.079US/liter) for diesel); fuel price CPI component rose 8.02 per cent. This in turn causes a higher transportation charge for swine producers goods and services. Consumer price index in August 2012 increased by 2.86 per cent compared with the end of 2011 and by 5.04 per cent compared to the same period in 2011. Consumer Price Index average for the first eight months of 2012 increased by 10.41 per cent compared to the average of the same period in 2011. Overall, food and catering services decreased by 0.18 per cent.

What to look for over the next few months

During the months of July and August, the Foot and Mouth Disease situation in Viet Nam was reported to be under control and stable. Currently, many herds have completed new rounds of vaccination and thus enhanced immunity levels. Recently, the Viet Namese Prime Minister, Nguyen Tan Dung stated that the Ministry of Agriculture and Rural Development would enhance animal quarantine and inspections services along the country's borders. However, the continued challenge has been the smuggling of all livestock into Viet Nam from neighboring countries. This can cause the drive for new services, and the risk of FMD outbreaks continues to be extremely high. (Within the country there are no provincial services for FMD-only National control measures.

With PRRS (Blue ear disease), the major problems occurred in April and May. The number of districts and provincial outbreaks for this year has increased compared to 2011. The total number of affected pigs was also higher, So far in 2012, the number of infected pigs that were destroyed is about 66 per cent, while the 2011 figure indicated about 96 per cent of the diseased pigs were destroyed. Most of the recent outbreaks occur initially in the midland and northern mountains including Lao Cai, Dien Bien, Lai Chau, Yen Bai, Hoa Binh and Phu Tho; then spreads down to the Red River Delta provinces such as North Ninh and Nam Dinh. In July, 2012, the country had 05 provinces: Lang Son, Dong Nai, Binh Duong, Nghe An and Dak Lak with PRRS at less than 21 days. Currently for the month of August, the Country has 03 provinces: Nghe An, Dak Lak and Cao Bang with PRRS at less than 21 days. PRRS was first detected in the northern mountainous province of Lao Cai on January 11 and has since spread to 123 districts within 13 provinces nationwide, affecting 34,000 pigs of which 21,700 had to be destroyed).

Farmers have been reluctant to use vaccines for PRRS as the drop in market pig prices has caused farmers to try and reduce their costs. According to Hoang Van Nam, head of the Animal Health Department under the Ministry of Agriculture and Rural Development, this lack of vaccination protocols may cause more outbreaks in the southern regions (especially Dong Nai and Bac Lieu provinces). Unusual weather conditions and high humidity makes the spread of PRRS easier. Also, reported transportation of diseased pigs along with the consumption of diseased pork leads to a higher incidence of PRRS in these areas of Viet Nam during the rainy season.

The Peoples' Committee of Hanoi City has been offering financial support for farmers who will move outside Hanoi City. The producers can continue to raise all types of livestock--100 commercial pigs, 2,000 chickens or 10 cows and buffaloes. The new farm has to meet required conditions such as be 500m from schools and hospitals. The land base has to be greater than10, 000 sqm. The City has plans to reduce the number of small-scale livestock households to about 40 per cent (by 2015) of todays' farm numbers within the city limits.( In 2010,Hanoi had about 5.9 per cent of the total pigs found in Viet Nam itself-1.625 million head as compared to the Country's total of 27.373 million pigs).

Recently, the Dong Nai Provincial Pig Farmer Association approached the Bank for Agriculture and Rural Development of Viet Nam to have the Bank consider the use of their on-farm pig inventory as collateral for loan security. The Bank rejected the proposal as they claim they can not validate the collateral. Currently, as mentioned in previous reports, farmers have poor access to bank loans and also that interest rates can be quite high.

Viet Nam Livestock Association claim that with current price ranges throughout Viet Nam, farmers are losing from 700,000 VND ($ 33.58 US) to 1,000,000 VND ($ 47.96 US) per 100 kg market pig (liveweight prices).