The animal feed market reacts to the raw material "price storm"

DNHN - The constant increase in the price of animal feed is a truth that has occurred since the Covid-19 outbreak became a worry and is affecting the domestic animal feed industry more and more.

Between 2015 and 2020, the price of imported animal feed components remained relatively consistent; however, beginning in October 2020 and continuing to the present, the price of raw materials has climbed continuously due to the impact of the Covid-19 epidemic.

In Viet Nam, the price of finished animal feed will grow by 18-22 per cent in 2021. The predominant usage of imported raw materials is attributed to the steady growth in animal feed prices in recent years.

According to the Department of Livestock Production (MARD), the price of soybean meal has increased by approximately 22% since February 2022, the price of soybean has increased by approximately 21%, the price of soybean has increased by approximately 21%, and the price of corn has increased by approximately 9%...

While the cost of animal feed continues to rise, Breeding costs are a significant percentage of production costs; typically, feed costs account for 65-70 per cent of production costs in the pig sector. Increased feed costs have had a detrimental effect on many livestock homes and farms, significantly cutting profitability.

In terms of industrial animal feed production, Vietnam is currently the tenth-largest country in the world and the first in Southeast Asia. There are 265 fully operational industrial animal feed manufacturing facilities in the United States, with a combined capacity of 41.4 million tonnes.

Only around 20% of these manufacturing facilities are handmade and have a design capacity of fewer than 30,000 tonnes per year; the remaining 80% have invested in advanced technologies and automated manufacturing lines.

Over 80% of animal feed manufacturing firms in Vietnam have implemented at least one quality management system such as ISO, HACCP, GMP, or an equivalent, including Tabaco. , Masan, Vinafeed, GreenFeed, and Lai Thieu, to name a few....

Each year, these manufacturing facilities require about 33 million tonnes of raw materials, but the domestic supply is only about 13 million tonnes (or 40%), with the remaining 22.3 million tonnes imported. Vinafeed Group is a rare indigenous firm that ranks among Vietnam's top ten animal feed manufacturers.

This group owns 03 plants in Dong Nai, Ha Nam, and Hai Duong with a combined annual capacity of one million tonnes. All three of the company's factories, in particular, use contemporary machinery systems based on Van Aarsen technology (Europe), which exceed stringent technical standards for uniformity and ensure adequate nutrition for pets.

Although the price of raw materials has increased in recent year and there have been several challenges with the import process, enterprises in the industry report that animal feed is not in short supply.

Pham Duc Luan, General Director of Vinafeed Group, stated: “From the beginning of 2021 to the present, despite the challenging situation of importing raw materials and high prices, Vinafeed Group has continued to supply the domestic market with around 500,000 tonnes of feed cattle each year".

Additionally, by utilising the "1 route, 2 destinations, 3 in-locations" strategy throughout the intricate evolution of the pandemic, Vinafeed Group ensures that sufficient commodities are available to all agents and retailers.

Vina and Happy are two product lines that are used in distribution and livestock ranches. Vinafeed Group also strives to share with farmers by keeping prices reasonable while maintaining high quality; and by supporting agents and distributors of a variety of anti-epidemic goods in the hope that they can all endure the market's challenging era".

One of the strategies being applied by firms in the sector to lower the cost of animal feed is to utilise domestic raw materials and develop a processing facility suitable for the livestock producing area to alleviate logistical pressures.

Apart from that, biotechnology is increasingly being used to improve the quality and cost of animal feed; re-evaluating nutritional criteria, focusing on the development of alternative micronutrients and domestic protein sources... is a direction that businesses in the industry are interested in. This is projected to considerably improve the livestock industry's competitiveness./.

By Lap Nguyen