Local farmers are facing financial challenges due to decreasing selling prices at the farm gate. This is driven by several factors such as increase in production, ongoing ASF cases that drive farmers to sell cheaper, rising costs of animal feed, and stagnant retail prices although prices in farms are decreasing.
Total pork production in Vietnam increased by 7.2% in 2023 [1]. This is much higher than the average growth rate in the period 2019-2023 which is 4.3%. The significant increase in the supply forced prices to be lower which was the case since mid-year 2023 until January 2024 in which the price has started picking up compared to previous year. The production cost is 45-52,000 VND/Kg (1.67-1.92 EUR/Kg) depending on farm size whereas the selling price did surpass 55,000 VND/Kg (2.03 EUR/Kg) for few months until recently giving very low margin for profit.
In addition, there is fear among pig farmers due to ASF cases which drives them to sell at a cheaper price. According to Department of Livestock, there were more than 530 outbreaks of ASF by end of 2023 across Vietnam [1]. The ASF cases are mostly focused on smaller farms which has limited impact in terms of infected pigs. However, the psychological impact on farmers and consumers is much larger which resulted in exaggerated lower prices.
Adding to the previous burdens, according to the Ministry of Agriculture and Rural Development, mixed feed price for pigs and poultry increased by 0.7-3.5% [2].
Therefore, farmers are selling pork at a breakeven or loss, depending on the farm size. This has still not reflected on retail prices which have not declined accordingly. The lowered prices increased profit margins for traders and retailers making those industries thrive while farmers are losing. Some farmers have already started reducing their pig herd to cut down the losses.
For 2024, It is expected that many smaller farms might not be able to sustain losses and might not be able to maintain business as well as larger farms might also reduce production to cut losses. This will cause a decrease in supply until prices increase and become profitable and more appealing again.
[1] Giá heo hơi xuống mức thấp nhất năm, người chăn nuôi không có lãi – Vietnam biz (vietnambiz.vn)
[2] Thịt lợn phục vụ Tết Nguyên đán 2024, người nuôi khóc – Vietnam.vn
[1] TÌNH HÌNH CHĂN NUÔI LỢN CỦA VIỆT NĂM 2023 Department of livestock production (cucchannuoi.gov.vn)
