The pork production cost is just VND50,000 per kilogram for closed husbandry chains, while the live pork price in the market is VND80,000.
The latest report of the Livestock Husbandry Department showed that Vietnam had 25.18 million pigs as of the end of July, or 81.9 percent of the herd of pigs it had prior to the African swine fever outbreak (31 million pigs as of December 31, 2018).
Twelve cities and provinces have resumed breeding and increased their herds of pigs by more than 100 percent, or 118.3 percent on average, in comparison with pre-epidemic time (December 2018). Binh Phuoc is leading the country with 164.7 percent, followed by Binh Dinh, Kon Tum and Dak Nong.
The report also pointed out that the average production cost is VND71,000 per kilogram of pork. Meanwhile, the figure would be lower, just VND50,000 per kilogram if applying closed husbandry line.
The live pork price has cooled down from its peak of VND100,000 per kilogram last May. However, even with the price of VND80,000 per kilogram, livestock companies still make high profits.
The continued high pork prices have prompted companies to increase farming scale. Some companies' herds of pigs have increased by 2-3 times, or even 10 times compared with January.
Reports of 16 big livestock companies showed that as of July 2020, they had 4.88 million pigs, up by 52.8 percent compared with January 2019. They plan to have 5.17 million pigs by the end of Q3 and 5.36 million by Q4.
|Reports of 16 big livestock companies showed that as of July 2020, they had 4.88 million pigs, up by 52.8 percent compared with January 2019. They plan to have 5.17 million pigs by the end of Q3 and 5.36 million by Q4.|
CP Vietnam now has 2.7 million pigs, or 200,000 pigs higher than January 2020.
The 84 percent pork price increase has helped CP Group, the holding company of CP Vietnam, obtain a revenue increase of 35 percent, at 52.5 billion baht, or VND39 trillion.
Dabaco has also made a fat profit thanks to the sharp increase of the pork price. As of July, the company had 250,000 pigs, up by 362 percent over January.
In H1, its revenue reached VND4.605 trillion, an increase of 40 percent over the same period last year. The company had post-tax profit of VND750 billion, or 28 times higher than the first half of 2019.
All livestock companies are rushing to expand the farming scale to take full advantage of the high market prices. CJ Group had only 212,000 pigs in January, but the figure rose to 756,000 in July. The figures were 105,000 and 276,000 for Japfa Comfeed, and 35,000 and 341,000 for Mavin. Hoa Phat Group has also doubled its herd of pigs.
Many enterprises had committed to slash the live pork prices to help stabilize pork prices. However, just days later, they broke their promise.
Efficient reproduction of pigs and enhancing imports of frozen pork and live pigs have made prices of live hogs fall, according to the Ministry of Agriculture and Rural Development (MARD).
The rising number of herd stock, plus pork imports, have helped lower the domestic pork price.