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Feed prices eat into breeder profit
Small-scale milch cow farmers are losing profits due to higher costs for animal feed and low prices offered by milk processing companies, according to many farmers.
Fees for animal feed account for at least 60 per cent of total expenses, farmers have said.
In response to complaints from farmers that milk companies had forced them to sell at low prices, representatives from Vinamilk and Friesland – Campina Viet Nam, the two biggest milk processors in Viet Nam, met with local officials and farmers last Thursday to discuss the situation.
The two companies told representatives of the city's Department of Agriculture and Rural Development that farmers' bankruptcies had been caused by the price of raw materials like animal feed and not by low prices offered by processing companies.
Nguyen Van Tui, Deputy Head of HCM City Farmer Association's Economy – Society Department, said the price of some animal feed had risen from 70 per cent to 133 per cent.
For example, rice straw now costs VND750 per kilo, up from VND400. Brewer's grains rose to VND1,050 a kilo from VND450 a kilo five months ago, according to Tui.
In addition, Vinamilk is buying fresh milk at VND7,950 per kilo, an increase of VND280 compared with the increase in price of VND220 in February.
Last December, farmers spent VND5,600 to VND6,300 to produce a kilo of fresh milk, which sold for VND6,500 to VND7,200.
Currently, the costs have risen from 28 per cent to 80 per cent, depending on the kind of animal feed. To produce a kilo of fresh milk, milch cow breeders have to spend at least VND8,000.
He said small-scale breeders were suffering losses of VND800 for each kilo of fresh milk produced.
Luu Van Tan, a representative from Friesland – Campina Viet Nam, said up to 60 per cent of raw materials used to make animal feed must be imported, which have caused prices to rise. Five years ago, the import rate was 50 per cent.
Nguyen Thi Nhu Hang, a representative from Vinamilk, said the most challenging issue was the price of animal feed.
"Our company also has milch cow farms so we understand the difficulties farmers face," he said.
As of April 30, the city has 72,850 milch cows raised by 8,876 households, with 36,267 cows giving milk.
About 111 households in Cu Chi District's Tan Thanh Dong Commune, the locality with the most milch cows in the city, have quit breeding milch cows, a loss of 4,265 cows citywide.
The city has around 2,242 small-scale cow breeding households that have less than five milch cows each.
Tui suggested that large-scale milch cow breeders should help the smaller households with advanced breeding techniques and breeding stocks so they can improve the quality of their cows' milk.
Van Dat
vietnamnews
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