Chicken breeders suffer losses amid price drops

Vietnamese chicken farmers have been suffering from big losses for a long time due to high input costs and low selling prices, an official said.

Nguyen Van Ngoc, Vice Chairman of Southeastern Poultry Association, said with about 550,000 battery chickens put on the market a day, the animal husbandry sector endures losses of dozens of billions of dong every day.

This year was a catastrophe for chicken breeders in Vietnam because the price was so low and it lasted for a long time, he said.

A rush of imports of cheap US chickens to the Vietnamese market since the end of last year caused the price of chicken to drop dramatically, he said.

The price later rebounded due to interference from government authorities. However, not long after that, frozen chicken continued to be imported with the price even cheaper than before, threatening the animal husbandry industry.

(Photo for illustration. nld.com.vn)

Nguyen Thanh Hoang, who lives in Dong Nai Province's Tan Phu District, has decided to give up farming after suffering big losses for a long time.

Three days ago, he sold 30,000 industrial chickens at only 16,000 VND (0.7 USD) per kilogram. After deducting expenses, he lost nearly 500,000,000 VND (22,100 USD).

"Chicken raising is no longer bringing in profits as its price is even cheaper than vegetables," he said.

Not only Hoang, but thousands of industrial chicken breeders in the country are also facing losses because the chicken price is now hovering around 15,000 VND (66 US cents) per kilogram, the lowest ever recorded. It is even below the production cost.

According to Nguyen Viet Hung, owner of a food supplier company in southern Binh Duong Province, a kilogram of US chicken thighs sold for less than 20,000 VND (88 US cents), much lower than domestically-produced counterpart.

The chicken price had plummeted as a result of a reduction in chicken exports from Vietnam to Cambodia with fierce competition from Thailand, insiders said.

Cambodia was once a large consumption market for chicken breeding farms in southern provinces. However, the market is now shared with Thai chicken with a more competitive price.

Many chicken breeding farms will have to cease their production if the low price of chicken goes on, according to Southeastern Poultry Association.

According to Doan Xuan Truc, Deputy Chairman and General Secretary of the Animal Husbandry Association of Vietnam, once the Trans-Pacific Partnership (TPP) agreement takes effect, the country's animal husbandry industry is expected to face fierce challenges because of low productivity, high production costs and small scale of production.

Speaking at a conference held in Hanoi last week, Truc said that the domestic industry is plagued with small-scale breeding, poor animal breed quality and outdated breeding technology.

Nearly 80 percent of breeding households worked on small-scale and production costs had gone up because of dependence on imports for raw materials used to produce animal feed and vaccines, he said.

"When the tax is reduced to zero percent, the animal husbandry sector still has to bear transportation costs for imported material, thus reducing the sector's competitiveness".

He urged the sector to push restructuring to cope with competition from abroad.

Tran Duy Khanh, Vice Chairman and General Secretary of the Vietnam Poultry Association suggested that the animal husbandry sector should focus on key farming products that have won prestige in the world market.

Khanh said farmers should raise free range chicken because it would be profitable for them.

The price of free range chicken was nearly four fold higher than the price of caged chicken in the US market, he added. Le Ba Lich, chairman of the Vietnam Animal Feed Association, said the country should increase the growing area of material for animal feed to reduce the reliance on imported material.