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Viet Nam Hog Markets

18 October 2012, at 7:53am

VIET NAM - On a national scale, the first nine months of the livestock situation has been quite complicated. Livestock production, compared with the same period last year, saw breeding intentions and actual matings improve and showed positive results in the first two quarters, but tended to decrease in the third quarter due to difficulty in prices (lower livestock prices and higher feed costs) and strong disease issues, especially with blue ear (PRRS) in swine, writes Ron Lane.

With cattle, except for dairy cattle which saw a large increase in numbers and thus increased milk production, the number of cows and thus meat production fell compared with the same period last year. Pig and poultry production slightly increased respectively by 2.6% and 7% compared to the same period last year. Feed prices and other costs for livestock remain high while the price of livestock for the producer is low. Livestock diseases caused problems with still some frequencies in some localities, especially avian and blue ear disease. In addition, in the first few months of this year, the banned use of products such as clenbuterol, caused a heavy drop in consumption of pork and thus prices as consumers turned to other, assumed safer products.

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 $ 1.97 US/kg) while in the South, the average selling price for market pigs was about 35,750 VND/kg ($1.71 US/kg). With an 8% drop, these prices would be near 32,660 to 37,720 VND/kg($1.57 to $1.81USD/kg) in the North while in the South, the average selling price for market pigs was about 33,000 ($1.58 USD/kg) for the month of September.

The pig prices have been falling since Tet and are now 32,000 to 38,000 VND/kg throughout the total country ($1.53 to 1.82 USD/kg). At these prices, the farmers have losses ranging from VND 600,000-1.3 million VND ($ 28.76 to$ 62.32 USD) per pig. "This situation is discouraging and is leading the industry into a crisis," said Nguyen Thanh Son, Deputy Head of the Husbandry Department.

As mentioned, the purchase price from farmers has decreased by about 8%, but through many supply chain intermediates- such as traders, transportation, slaughtering, processing and distribution, consumers still had to buy pork at a very expensive price. Looking at surveys taken at the markets, these data show that pork meat prices have started to decline from 2,000 to 5,000 VND/kg ($0.10 to $0.24 USD/kg) compared with the previous month. However, boneless loins are priced at 120,000 VND/kg($5.75 USD/kg) and buttocks-hams are at 85,000 to 95,000 VND/kg($4.07 to $4.55 USD/kg). Compared to mid-July, pork in the North has dropped to an average of 63,000 VND/kg ($3.02 USD/kg) and in the South has dropped to 55,000 to 57,000 VND/kg ($2.64 to $2.73 USD/kg) for similar pork products.

According to calculations by the Department of Animal Husbandry and made by Mr. Nguyen Dang Vang, a market pig takes from birth to finished weight (100 kgs) about 5 months. Meat on the market today is mainly from pigs born in mid-April. But starting in May, when the live hog price at that time was 60,000 VND/kg($ 2.88 USD/kg), many producers had increased breedings. With continued good prices, well into last June and July, meat prices continued to rise, and this in turn caused farmers to expand production scale. All the pigs born in May and June will be on the market in late September and October. This will mean plentiful supply and the price of pigs and pork from the end of September and into the 4th quarter will be significantly reduced. This is also the reason why Mr. Vang’s information from now to the Lunar New Year, predicts the market will not lack in total pork supply. In addition, according to Mr Nguyen Dang Vang analysis: because of the current Vietnamese pig price plus shipping costs to China, the traders in China are not buying anymore from Vietnam. The domestic supply will not see a shortage like a few months ago. Thus, the price for pigs will remain low.

Estimated total pig population in the Country to mid-September is approximately equal to the number for the same period as last year. However, market pigs (hog finishers) saw their total output increased by 2.6% compared to the same period in 2011. Notably, the higher increase in the number of finished pigs (in the first nine months) was mainly due to a sharp increase of finisher pigs marketed during the first 6 months of 2012. In the recently completed third quarter, market pig production decreased due to reduced selling prices leading to reduced breeding, reduced on-farm numbers and lower re-investment in swine farms. This could lead to the lower supply of pigs in the last month of the year.

There has been significant commodity price increases in September. Accordingly, the price of concentrates has increased by about 400 VND/kg($0.02 USD/kg) and complete feed has increased by about 200 VND/kg ($0.01 USD/kg) Furthermore, from the beginning of August, the price of animal feed has increased two times with a total increase of 800 VND/kg($0.04 USD/kg) for concentrate and 300 VND/kg ($0.015 USD/kg) for complete feed. The price of complete feed is expected to rise a further 200 VND/kg($0.01/kg) in October.

According to the feed manufacturers, the prices of raw materials such as corn, soybean meal, fish oil and other commodities have increased dramatically pushing feed prices higher as noted by Mr. Pham Duc Binh, Deputy Chairman of the Association of the Vietnamese Feed. The reason, according to Mr. Binh is due to the drought situation in the USA; dryness in Russia that can reduce the crop size for soybeans, corn and wheat and China is developing a strong livestock feed growth and thus is putting pressure on global supplies and prices.

In conversation with the Ministry of Agriculture and Rural Development, it was mentioned that compared with July and August, the domestic price of rice bran was 7.245 VND/kg (an increase of 7.8% to the previous month). All feed prices increased by about 2% for complete feed for pigs. Finishing pig feed from 60 kg to the finished stage (around 100 kg liveweight) is close to 9,430 VND/kg ($0.452 USD/kg).

According to the Ministry of Agriculture and Rural Development, wheat imports into Vietnam in August were 205.000 tons worth a value of $ 66 million USD. Total imports for the first 8 months of this year, reached nearly 2 million tons worth a total value of $ 584 million, up more than 22% in volume and 8.1% in value compared to the first 8 months in 2011. Looking at all feed commodities and raw materials (ingredients), for the first eight months of 2012, Vietnam spent a total amount of $1.48 billion USD on all imports.

Rice exports hit a record in August and during the first eight months have increased 1.4% compared to the same period last year and was able to pass a record 7.11 million tonnes as compared to the previous year.

Foot and mouth disease: In September, FMD was still controlled in most localities. There were no major outbreaks. Some old provincial outbreaks in the Red River Delta, Northern Mountains, North Central, South Central and Highlands regions, still maintain a high risk alert for seasonal outbreaks and are closely monitored.

Blue ear disease: In September, the country has more signs of PRRS in Bac Can and Can Tho Provinces. The local outbreak is being monitored. In Dak Lak, a previous outbreak continues to spread. In Cao Bang, the spread has been temporary controlled. Nghe An province has announced the end of signs of PRRS. Overall, the PRRS disease tends to decrease and is gradually being controlled. However, the risk of continuing to be spread and to occur in the near future is very high. Currently, there are 4 provinces that have PRRS: Dak Lak, Cao Bang, Bac Can and Can Tho (have PRRS less than 21 days).

The planned target for CPI for 2012 is less than 10%. Year on year (September/2012 compared with September/2011), the CPI increased by 6.48%. This is higher than the corresponding CPI of the previous two months (August rose 5.04% and July rose by 5.35%), but lower than that of the months from August, 2011 to June, 2012). It is expected that for the next 3 months, the CPI could increase about 1.5% month and this would show a CPI of about 9.93% - that is still within the goal as noted before.

In Vietnam, consumer spending on food accounts for about 40% of the total expenditures in a household. Increased food production in 2011 and continued growth in the early parts of 2012, resulted in lower food prices for the first eight months of 2012. Now, food prices are increasing again. World food prices are forecast to increase due to the impact of drought, storms and poor growing conditions in some countries. The farmers suffer when food prices are reduced while input costs of production, prices of commodities and other consumer services have increased. The State has been urged to give the producers’ support with the purchase of temporary storage of food, by increasing exports and to provide general support for aquaculture.

An official from the Union of Producers and Employers of Meat Industry (UPEMI) which is part of the European Union (EU) mentioned that several initiatives are in the works to enhance exports of meat-mainly pork and beef- to Vietnam. Agniezka Rózánka, with UPEMI’s International Projects said that meetings with Vietnamese importers to help them in improving meat quality and foodstuff safety will be conducted. They will also meet with Government officials and Vietnamese agribusinesses to provide information and extension services on farming technologies.