Vietnamese dairy farmers barely can stay in business

25-05-2010 | |

Dairy cow business is not profitable in Vietnam. Dairy farmers farms in HCM City voiced the this complaint during a meeting with the HCM City Agriculture and Rural Development Department recently.

Tran Van Lien, a farmer in Binh Chanh District in HCM City, provided noteworthy figures about what he got after one year of breeding milk cows.
Lien said that he had to spend 25 million dong (€1,048) per milk cow a year, including 23 million dong (€964) on animal feed. Meanwhile, he got 4,500 kilogrammes of milk. Dairy producers purchase milk at 7000 dong (€0.29) per kilo on average, Lien’s profit is 3.5 million dong (€146.80).
According to Lien, in his herd of 20-30 cows, only 15-20 cows give milk. Therefore, the money he got from selling milk was not high enough to feed the whole herd of cows.
Loss making
HCM City Farmers’ Association conducted a survey on 200 milk cow farming households in the city, the total expenses for every kilogramme of fresh milk is as high as 8,100 dong.
Meanwhile, dairy producers pay 7,000-7,200 dong only for every kilogramme of milk. As such, farmers are incurring the loss of 800 dong per every kilogramme of milk.
Increased feed prices
Nguyen Van Tui from the HCM City Farmers’ Association said that the higher price of animal feed is the main reason that makes farmers incur losses. Tui said that the cattle feed has increased in price seven times since the beginning of the year, 25% in total.
A 25 kilo bag of bran was sold at 215,000 dong several months ago, while it is now selling at 237-245,000 dong. Meanwhile, farmers cannot raise the sale prices of fresh milk, because dairy producers refuse to collect milk at higher prices.
Fewer cows
Heavy loss has prompted farmers to give up farming. According to the city’s farmers’ association, the number of dairy cows in the city has decreased by 6,000 so far this year.
Tui pointed out that it is unreasonable for dairy producers to fix milk prices. He also pointed out that the 7,000 dong per kilo price is much lower than the price of 28,000 dong per kilo at which dairy producers sell products to the market. While farmers have to work hard, they cannot reap the rewards in the production chain.
Tui has warned that if dairy producers continue to keep the milk purchase prices at low levels, they will lose material suppliers, because farmers, due to the low profit and loss, will stop farming.
Source: VietnamNet/Tien phong

Dick Ziggers Former editor All About Feed