Pork prices hit new high, livestock "giants" make huge profits

Imbalance in supply and demand pushes pork prices up sharply and reaches peak in 2023

In recent days, the price of live pigs has continued to increase. In the North, the price of this item has increased to 66,000-67,000 VND/kg; while in the Central and Central Highlands, the price is also at 62,000-65,000 VND/kg.

On this occasion in Dong Nai and Ho Chi Minh City, farmers sold live pigs for 68,000-68,500 VND/kg - higher than the peak of 67,000 VND/kg recorded in early July 2023. In some other localities in the South, the price of live pigs is commonly around 64,000-65,000 VND/kg.

According to Mr. Nguyen Tri Cong - Chairman of Dong Nai Livestock Association - the increase in live pig price is in line with market rules when supply has decreased quite sharply. For a long time, the live pig price has dropped to 50,000 VND/kg, many pig farmers have fallen into difficult situations, no profit, so they have to reduce their herds or hang up their pens.

Up to now, the price of live pigs has increased to 65,000 VND/kg, which is reasonable and farmers have good profits.

In the next two months, the price of this commodity may continue to increase. The reason is that farmers do not dare to restock much, and businesses have increased resources but it will be difficult to increase sharply when the epidemic is raging.

Livestock businesses also believe that pig prices will continue to rise, as the market is currently experiencing a supply shortage and it will take at least 18 months to overcome this situation.

In particular, with a large pig herd, plus a recovering selling price, livestock businesses are confident that they will earn huge profits of 1.5-2.5 million VND when selling a 100kg pig, with an average selling price of 65,000 VND/kg.

At the end of April, at the annual general meeting of shareholders, Mr. Truong Sy Ba, Chairman of the Board of Directors of BaF Vietnam Agriculture JSC, shared that raw materials account for up to 70% of the cost of raising pigs. Raw material prices have a lag of about 6-8 months, so the price of pigs in the first quarter of 2024 still records the price of raw materials from the third quarter of 2023.

Accordingly, the low raw material prices in the first months of 2024 will be recorded from the second quarter. That is, the price of finished animal feed in the country is forecast to maintain a downward trend, and the cost of raising pigs will also decrease.

BaF Vietnam currently owns 32 sow and pork farms with a total scale of up to 430,000 pigs, supplying about 1 million commercial pigs to the market per year.

Notably, the cost of pig farming of BaF is at 40,000 VND/kg, quite low compared to the general level. This enterprise can make a huge profit of 2.5 million VND/pig when selling, with the selling price of 65,000 VND/kg.

Similarly, Mr. Doan Nguyen Duc (Bau Duc), Chairman of the Board of Directors of Hoang Anh Gia Lai Joint Stock Company, also revealed that pig prices are very good, while the cost of raising pigs on large farms is only 46,000-49,000 VND/kg. Profits from raising pigs can increase by 30-40%.

Therefore, Mr. Duc said that in May and June this year, the herd will increase and by the end of the year, it is expected to fill up the existing barns. Revenue from pigs in 2025 could surpass the company's fruit sales.

Revealing that the cost of raising pigs is only 48,000-51,000 VND/kg, Mr. Nguyen Nhu So, Chairman of the Board of Directors of Dabaco Group Joint Stock Company, said that the profit in the second quarter of 2024 could be more than 3 times higher than the results of the first quarter thanks to the increase in pork prices along with the herd productivity at the highest level in history.

According to the report of the Ministry of Agriculture and Rural Development, by the end of April, the total pig herd in the country reached more than 28 million. The livestock industry received more good news when Tay Ninh was declared a disease-free area.

This is a particularly important factor, because according to the regulations of the World Organization for Animal Health (OIE), when exporting animal and animal products, it is mandatory to comply with regulations and criteria on disease-free zones.

When this criterion is met, livestock products, including pork, can be exported to more countries. In addition to traditional markets, Vietnam can export pork to Japan and South Korea; and export chicken breast to Europe. Expanding the export market also means reducing consumption pressure in the domestic market, and product prices will be more stable.

TH (according to Vietnamnet)

Source