Chicken breeders suffer losses amid price drops

Update: December, 26/2015 - 10:30
A chicken farm in Southern Dong Nai Province. Vietnamese chicken farmers have been suffering from big losses for a long time due to high input costs and low selling prices. — Photo
HCM City  (VNS) — Vietnamese chicken farmers have been suffering from big losses for a long time due to high input costs and low selling prices, an official said.

Nguyen Van Ngoc, Vice Chairman of Southeastern Poultry Association, said with about 550,000 battery chickens available to the market a day, the animal husbandry sector endured losses of dozens of billions of dong every day.

This year is a catastrophe for chicken breeders in Viet Nam because the price was so low and it lasted for a long time, he said.

A rush of imports of cheap US chickens to the Vietnamese market since the end of last year caused the price of chicken to drop dramatically, he said.

The price later rebounded due to interference from government authorities. However, not long after that, frozen chicken continued to be imported with the price even cheaper than before, threatening the animal husbandry industry.

Nguyen Thanh Hoang, who lives in Dong Nai Province's Tan Phu District, has decided to give up farming after suffering big losses for a long time.

Three days ago, he sold 30,000 industrial chickens at only VND16,000 (US$0.7) per kilogram. After deducting expenses, he lost nearly VND500,000,000 ($22,100).

"Early this year, I lost several hundred million dong. I got some profits in September but now I have nothing,"

"Chicken raising is no longer bringing in profits as its price is even cheaper than vegetables," he said.

Not only Hoang, but also thousands of industrial chicken breeders in the country are facing losses because the chicken price is now hovering around VND15,000 (66 cents)per kilogram, the lowest ever recorded. It is even below the production cost.

According to Nguyen Viet Hung, owner of food supplier company in Binh Duong Province, a kilogram of US chicken thighs sold for less than VND20,000 ($88 cents), much lower than the Vietnamese one.

The chicken price had plummeted as a result of a reduction in chicken exports from Viet Nam to Cambodia with fierce competition from Thailand, insiders said.

Cambodia was once a large consumption market for chicken breeding farms in southern provinces. However, the market is shared with Thai chicken with a more competitive price. Thus, there was an oversupply of chicken in Viet Nam.

Many chicken breeding farms will have to cease their production if the low price of chicken goes on, according to Southeastern Poultry Association.

Competition heats up

According to Doan Xuan Truc, deputy chairman cum general secretary of the Animal Husbandry Association of Viet Nam, once Trans-Pacific Partnership (TPP) starts, the country's animal husbandry industry is expected to face fierce challenges because of low productivity, high production costs and small scale of production.

Speaking at a conference held in Ha Noi last week, Truc said that the domestic industry was plagued with small-scale breeding, poor animal breed quality, poor breeding technology.

Nearly 80 per cent of breeding households worked on small-scale and production costs had gone up because of dependence on imports for raw materials used to produce animal feed and vaccines, he said.

"For example, a Vietnamese worker can raise about 5,000 chickens while a Thai counterpart can handle 20,000 chickens," Truc said.

"When the tax is reduced to zero per cent, the animal husbandry sector still has to bear transportation costs for imported material, thus reducing the sector's competitiveness".

He urged the sector to push up restructuring and accomplishing modes of transportation to cope with competition from abroad.

He said that joining TPP would help the industry access new technology, products and animal breeds as well as production methods.

Tran Duy Khanh, Vice chairman and general secretary of the Vietnam Poultry Association suggested that the animal husbandry sector should focus on key farming products that have won prestige in the world market.

Khanh said farmers should raise free range chicken because it would be profitable for them.

The price of free range chicken was nearly four fold higher than the price of caged chicken in the US market, he added.

Le Ba Lich, chairman of the Viet Nam Animal Feed Association, said the country should increase the growing area of material for animal feed to reduce the reliance on imported material. — VNS