Supply and purchase power shifts adding costs to pork

Supply and purchase power shifts adding costs to pork

Short-term shortage of supply is pushing up pork prices, while livestock businesses have announced impressive growth figures.

It is expected that livestock firms will raise output of pigs, meaning pork prices will cool down, Photo: Thaco

Prices of live pigs continued to increase in February, recording a significant rise to around VND75-80,000 ($3-3.20) per kilogramme, an increase of about 50 US cents compared to the price at the end of 2024.

At wholesale markets in the north and south, the number of pigs imported has dipped by 50-60 per cent from January. In Ho Chi Minh City, the number of pigs arriving at wholesale markets in mid-February was only about 5,500, while normally it surpasses 10,000.

C.P. Vietnam Corporation, which has the largest market share in the livestock industry, sold 28,000-29,000 pigs every day before Lunar New Year, but this has since dropped to 17,000-18,000. The weight of pigs also decreased to 80-85kg, instead of 100 kg as before.

Le Xuan Huy, senior deputy general director of C.P. Vietnam, said, “There is no shortage of pork in the market because the total herd in the country is currently considerable. However, a short-term shortage is occurring because the rate of household farming has dropped significantly, and it takes time for industrial farming of large enterprises to cover small farms.”

For example, in the southern province of Dong Nai, one of the largest hubs of livestock production in Vietnam, many households used to raise pigs, but after being relocated, they switched to raising ducks. About 60-80 per cent of relocated households no longer raise pigs, so output cannot meet the market demand in a short time.

“Current purchasing power is not high and pork prices are increasing, but consumers have many other alternatives such as chicken or eggs,” Huy said.

Nguyen Kim Doan, vice chairman of the Dong Nai Livestock Association, added, “African swine fever has not been controlled yet, and is still occurring at many farms and businesses. Besides this, diarrhoea is causing a decrease in the birth rate in sows to only 50 per cent, and pneumonia has caused a loss of output,” Doan said.

Moreover, late last year, thousands of local livestock farms in Dong Nai province had to relocate out of residential areas and areas not planned for livestock farming. Many farms have yet to restock. As a result, the total pig herd in Dong Nai has decreased.

According to the Department of Livestock Production under the Ministry of Agriculture and Rural Development, as of February, the total pig herd in the country was over 30 million, up 3.7 per cent on-year.

Meanwhile, livestock companies reported brightened results for 2024. Dabaco Group reported $543 million in total revenue, up 22 per cent on year, and after-tax profit soared 31-fold to $30.76 million. In the fourth quarter, the group gained $9.5 million, a 40-fold on-year increase.

After building a pig farm in the north-central province of Thanh Hoa, Dabaco plans to deploy two new farms in the northern provinces of Thai Nguyen and Hoa Binh, with a size of more than 5,000 sows per farm.

Elsewhere, BAF saw a record profit of $12.9 million, 12 times higher than last year. Although there was a significant contribution from selling assets in the first quarter, the fourth quarter was also impressive to move from a loss of $1.24 million to a profit of more than $4.3 million.

By the end of 2024, the company was operating 36 high-tech farms across the country, raising the total herd to more than 500,000 pigs, and output of nearly one million commercial pigs per year. The company said it will put into operation six new farm clusters with advanced technical standards by the end of 2025.

Masan MEATLife has also been making traction after restructuring. The enterprise currently owns a high-tech pig farm in the central province of Nghe An with a total area of ​​over 220 hectares and investment of up to $56 million, capable of supplying 250,000 pigs per year.

The company broke its two-year losing streak with a profit of $1.08 million, much improved from the loss of $15.4 million in 2023. Revenues from fresh and processed meat rose 15.4 per cent, while revenues from the farm decreased 7.3 per cent.

VIR