Better livestock planning needed to moderate food prices

What can we expect from capital ventures into livestock breeding in current context?

A sharp decline was seen in the sector’s production output in the first quarter this year compared to one year earlier on the back of falling prices, particularly that of pig.

That was because from late 2012 farmers over-emphasised expanding cattle herds serving the Lunar New Year (Tet) demands. The market was then fed with fruitful supply sources versus low consumption.

With current price levels (pig wholesale price is VND42,000-VND43,000 ($2) per kg in  the north and VND38,000-VND40,000 ($1.8) per kg in the south), investors even caught some losses. Since the output market encounters hardships, breed production facilities are also put in a fix.

In the past, the food sector faced fewer economic difficulties. This year was different. Why?

The food price this year was unlike that in previous years. Usually, the food price was stable or surged a bit after Tet. This year, it took a plunge, showing poor market demands.

The demand for pork and chicken fell remarkably. Formerly, one fourth of chicken volume was consumed by industrial parks (IPs), now economic woes took a hit on IP development, leading to scores of IP face either closing the door or retrenched production. The demand for food was sagging also.

Hardships in the food and animal husbandry sectors would hold at least to the end of the second quarter, particularly regarding pork trading.

Some people said current inappropriate livestock breeding structure has caused the price constantly going down and the sector needed to lower pork rate and raising the rate of other food species. What is your view?

That is true. The Agriculture and Rural Development contemplated lowering pig heads and hiking chickens. However, consumption of chicken and eggs did not commensurate with that structural change. At some points of time, the price of chicken and eggs went down quickly. Meanwhile, such prices stood high near Tet.

In my view, since the Vietnamese people prefer using fresh meat, changing current breeding structure has proven a very challenging task. Things could change when people acquired the habit of using frozen food or fast food.

Cattle herds were reduced in number due to financial losses. Will this cause supply deficiency and drive up the food price?

That is a vicious circle that we have talked many times. When the demand soars, the supply cannot meet and when the supply escalates, price plummets. Hence, this situation would continue unless the animal husbandry sector could outline a sustainable development strategy.