World meat industry news

According to the General Statistics Office, Vietnam currently has about 27.2 million pigs on the farms (up 2.9 per cent from last year at this time), writes Ron Lane, Business Director for Asia Pacific and Meggie Vo, Genesus Marketing Representative in Vietnam.

The hog market production reached 2.05 million tonnes of pork in the first 6 months of 2015 which is an increase of 3.9 per cent as compared to the same period in 2014.

The Ministry of Agriculture forecasts an increase in output this year of 2.4 per cent to 3.37 million tonnes.

In the first six months of the pig breeding year, production developed quite smoothly as the incidence of PRRS (blue ear) did not occur and the selling price of the market pig remains at levels that is profitable for the farmers.

Pig production and pork production in Vietnam is still mainly from small livestock farms that still account for 65-70 per cent of the pigs marketed and 56-60 per cent for the pork produced. These farms do not have the efficiency of large scale farms.

The total value of livestock for the first 6 months of 2015 increased approximately 4 per cent as compared to 1.73 per cent for the first 6 levels in 2014.

Market pig prices in June had only slight variations with prices between 45,500 to 47,000 VND/kg ($2.09 to $2.16 USD/kg-$0.95 to $0.98 USD/lb.).

Pork loin prices were approximately 85,000 to 90,000 VND/kg ($ 3.90 to $ 4.13 USD/kg- $ 1.77 to 1.87 USD/lb.) and lean sirloin prices were 80,000 to 85,000 VND/kg ($ 3.67 to $ 3.90 USD/kg- $ 1.67 to $ 1.77 USD/lb.).

During the month of May, the price of live pigs in many localities was also generally quite stable compared to the previous month.

Namely, in Dong Nai, the market price was about 47,000 to 48,000 VND/kg ($ 2.16 to $ 2.20 USD/kg-$0.98 to $ 1.00 USD/lb.); Vinh Long 48,000 VND/kg $ 2.20 USD/kg-$1.00USD/lb.); and An Giang 50,000 to 51,000 VND/kg ($ 2.30 to 2.34 USD/kg-$ 1.04 to $ 1.06 USD/lb.) While the market price for pigs has declined in quarter 2, the Vietnamese swine producer has seen reasonable profits as feed prices have also declined.

The import value of commodity groups and animal feed ingredients for the month of June is estimated at $ 303 million USD, bringing the value of imports for the first 6 months of 2015 at $ 1.73 billion USD- up 7.8 per cent over the same period in 2014.

For this year, the major importers of the various commodity group/feed ingredients are Argentina (representing 36.6 per cent market share); followed by the USA (19.2 per cent ) and China (7.4 per cent ).

The estimated corn import volume in June reached 352 thousand tonnes with a value of $ 72 million USD, bringing the volume of imported corn in the first 6 months of 2015 to 3.27 million tonnes with an import value reaching $ 744 million USD-up 36.8 per cent in volume and up 20.7 per cent in value over the same period of 2014.

Brazil, Argentina and India are the three main suppliers accounting for 58.0 per cent ; 34.9 per cent and 3.4 per cent, respectively, of the total import volume of commodities.

There is a current paradox in corn production as prices for imported corn imports are cheaper than domestic corn prices. Specifically, the current price of imported corn is being offered for sale on the trading floor at a present price of only $ 245 to $ 248 USD per ton or the equivalent of only 5,800 to 5,900 VND/kg ($0.267 USD to $0.271 USD/kg-$0.121 to $0.123 USD/lb.).

Meanwhile, the domestic price of corn is at a level around 6,200 VND/kg ($0.285 USD/kg-$0.129 USD/lb.).

The estimated wheat import volume in June was 352 thousand tonnes with a value of $ 76 million USD, bringing the volume of wheat imports in the first six months of 2015 to 1.28 million tonnes with import value reaching $ 330 million USD-up 31.1 per cent in volume and an increase of 5.1 per cent in value over the same period of 2014.

The chief import market for wheat is from Australia, accounting for 53.8 per cent ; followed by Brazil accounting for 28.5 per cent of the total import volume.

During the month of June, Vietnam imported 216 thousand tonnes of soybeans with a total value worth $ 91 million USD. During the first 6 months, Vietnam imported 948 thousand tonnes of soybeans (value of $438 million USD- an increase of 5.8 per cent in volume but a decrease of 17.1 per cent in value compared to last year.

In the past marketing year (2013/14), the USA became the largest exporter of soybeans to Vietnam. The USDA Grain Report showed that close to 700,000 tonnes of soybeans came to Vietnam (an increase of 26 per cent over the previous year).

In the current marketing year, soybean imports will reach close to 750,000 tonnes. The total soybean meal imports were at 3.64 million tonnes (a 14 per cent increase in demand) during the past crop year.

The pig livestock numbers have grown strongly in early 2015. As reported by the Department of Agriculture and Rural Development for one survey in one province (Binh Phuoc province).

The current inventory in the province is 260,133 pigs-with market pigs accounting for 224,662 pigs, (86.36 per cent of the total inventory; with 34,575 sows (representing 13.29 per cent of the total—this is in line with the normal of 13 to 14 per cent of the farm inventory being breeding stock and 896 boars (1 boar to about 39 sows), representing 0.34 per cent of the total herd.

One hundred and sixty –five farms (165) account for 91.12 per cent of the total pig population of this province (Inclusive- 2 GGP farms with 350 and 650 sows; 8-scale farms 1,200 - 12,000 sows, 28 farm-scale mixed from 150 to 600 sows; 5 farrowing only scale farms and 122 scale pork producers-mainly finishing from 250-12,000 pigs.

Whole pig farms with foreign investment account for 81.21 per cent of 134 farms, whereas, local farmers have invested in the other 31 farms, accounting for 18.78 per cent of the total pig farms in the province. During this year, it is expected that 13 pig breeding establishments will further invest in the province.

Mr Ho Xuan Hung, Chairman of the Vietnam Agriculture and Rural Development Association, recently reported that the year 2010 was the turning point for Vietnam agriculture in general as well as the beginning of extensive international integration.

Since that time, 8 Free Trade Agreements (FTA) have been signed with the initial implementation process happening.

Currently, Vietnam is discussing to proceed with the signing of 6 more FTAs, including the AEC and TPP. However, these FTAs are creating huge challenges for Vietnam, as “the problem posed is the cultivation of Vietnam –what should they prepare and what to specify in the "playing field" that is fierce”.

Vietnam’s livestock industry has low productivity, very high production costs and quite small scale production units. Further to this and speaking at a conference held in Ho Chi Minh City, Doan Xuan Truc, Deputy Chairman and General Secretary of the Animal Husbandry Association, said that the FTAs could have an adverse effect on the livestock industry. At the same time, he mentioned that the same new FTAs will force Vietnam to change.

Access to new products and methods and technology and improved animal breeds will benefit the industry. “If the sector does not lower production costs, cheaper imported meat will enter the market.”