Animal feed production enterprises face difficulties

In 2024, the animal feed industry is forecast to face more difficulties than in 2023 due to high input material prices; complicated pig disease developments, unstable commercial meat prices, high breeding prices, and slow herd restoration by farmers. Animal feed manufacturing enterprises are still operating while "listening" to the market situation to adjust operating capacity appropriately and limit inventory.

According to data from relevant agencies, animal feed production output has tended to decrease in recent years, especially in 2023. Particularly in the province's industrial zones, in 2023, the total animal feed consumption output will only reach about 1 million tons, equal to 85% of the annual plan. The reason is that the epidemic in livestock and poultry, especially African swine fever in pigs, is complicated, and at many times pig farmers are losing money, making them hesitant to restock. In addition, difficulties caused by the impact of the Covid-19 epidemic, conflicts in some parts of the world, employment issues, economic crises, etc. have affected people's income, weak purchasing power affects the supply of commercial meat, thereby causing difficulties for the livestock industry and slow consumption of animal feed.

For example, Hoan Duong Production and Trading Joint Stock Company, Dong Van I Industrial Park (Duy Tien) has been facing continuous difficulties in its production and business activities over the past 3 years. In 2023, the output of consumed products decreased by 30% compared to 2022 and decreased by nearly 50% compared to the time before the Covid-19 outbreak. Slow consumption, high input material prices, in the first months of 2024, the company continued to have to reduce the output of imported raw materials as well as the output of animal feed production. In addition, the company could no longer maintain revenue from being an intermediary channel to import raw materials to supply to feed production enterprises in the area because the animal feed consumption market was facing difficulties, and enterprises all reduced their operating capacity.

In 2024, Hoan Duong Production and Trading Joint Stock Company "modestly" set a target of producing and consuming about 45,000 tons of animal feed, equal to 100% of 2023. Currently, Hoan Duong is expecting that input material prices are expected to "cool down" in the second half of 2024, which will reduce the burden of production costs for the business. Thereby, creating motivation for the business to increase revenue from exploiting the additional supply of input materials.

**Hoan Duong Production and Trading Joint Stock Company, Dong Van I Industrial Park (Duy Tien) has continuously reduced the consumption of animal feed in recent years.** Photo: Han Han

Mr. Nguyen Van Khanh, Head of Legal Department, Hoan Duong Production and Trading Joint Stock Company said: Currently, 100% of raw materials for the company's production are imported from abroad, mainly from India, Denmark, Russia, South American countries... The cost of raw materials and logistics services is always high, while to stimulate consumption, the company has to reduce the selling price of most animal feed and poultry products. Along with that, the price of piglets is also at a high level, forcing many households and farms to "empty their cages" or reduce the size of their herds. Therefore, the demand for animal feed has decreased sharply. The company has had to continuously cut labor in production departments, and at this time does not dare to produce massively to limit inventory.

Similarly, difficulties piled on difficulties, in 2023, the animal feed consumption output of Hong Ha Nutrition Joint Stock Company, Dong Van II Industrial Park was only 85% compared to 2022 and did not meet the plan. The solution that the company has promoted to maintain production in the difficult context is to search for and import raw materials with the lowest cost to reduce production costs and increase product competitiveness. At the same time, it focuses on investing in machinery and technology, aiming to apply automation in production stages to increase productivity, product quality, reduce labor costs, etc.

According to Ms. Hoang Thi Ngoc Anh, Administrative Director of Hong Ha Nutrition Joint Stock Company, currently, the biggest difficulty for the animal feed production industry in general and Hong Ha in particular is that farms and livestock households are very limited in restocking chicken and pig herds due to unstable commercial chicken prices and complicated disease developments. Hong Ha strives to increase its consumption output in 2024 by 20% compared to 2023. However, this target will be very difficult to achieve if the epidemic situation is not controlled and raw material prices remain high as they are now. In the context of the world economy and Vietnam facing many difficulties and challenges, animal feed production enterprises are also facing many difficulties in the consumption market. Therefore, enterprises are in great need of support solutions to promote production and business.

To reduce dependence on imported raw materials, businesses hope that the Government will consider, support and facilitate businesses in planning and developing raw materials for animal feed production. In addition, the authorities should strengthen inspection and control of border routes, preventing pigs from being smuggled into Vietnam. Thereby, helping the domestic livestock industry to prosper in the coming time, which will promote the recovery and development of animal feed production and trading activities.

Nguyen Oanh

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