On January 11, 2019, Vietnam Dairy Association has a summarized report of 2018 for the industry. According to the Vietnam Dairy Association, in the past year, the dairy industry in Vietnam has always achieved good growth rates in terms of milk production, dairy products and total revenue.
In 2018, the total revenue reached VND 109,000 billion, the growth rate reached 9% compared to 2017. The period 2010-2018, the average growth rate of total revenue of the dairy industry reached 12.7% / year, has the highest growth rate for food products with livestock sources.
Of the total revenue of our country’s dairy industry, Vinamilk and the largest dairy industry alone reached VND 52,630 billion (incomplete data), accounting for 48.2%.
Table 1 – Total revenue of the dairy industry in the period of 2010-2018
Enterprises in the industry are constantly investing, constructing, improving, innovating techniques and technologies applied in factories in the past years. A number of large dairy producers and processors have been and will invest heavily in equipment, apply high-level automation technology at regional and world level to improve productivity, quality, food safety, product diversification, improve efficiency, competitiveness and reach more and more deeply into the value chain of milk and dairy products in domestic and foreign markets.
Enterprises continue to diversify products, market new products such as organic products, special nutritional products. However, the two main product groups determine the growth of the whole domestic dairy industry and are also the two most important groups of products: liquid milk and powdered milk. The total market value of these two groups accounted for nearly three-quarters of the market value. In 2018, fresh milk production reached 1,519.9 thousand liters, powdered milk output was 138 thousand tons, up slightly by 2.1% compared to 2017
Table 2 – Production of liquid milk and powdered milk.
As reported by the Department of Livestock Production, Ministry of Agriculture and Rural Development, the number of dairy herds in the country is increasing strongly in the past years as large enterprises increase investment in infrastructure for production expand the scale of animal husbandry to ensure the quality of raw milk sources aiming to bring quality products and food safety to consumers and to serve the National School Milk Program when using raw milk as the main input material. Recognize the importance of raw milk areas, many businesses have actively built on-site raw material areas with production links with cow farmers to ensure security for milk production, to create jobs, reduce dependence on imported milk and milk products. The dairy market in recent years has witnessed the acceleration of new construction of large-scale dairy farms import more good breeds and high quality seed products from the USA and Australia.
Many farms have been granted certificates by international organizations Farming system meets Global standards: G.A.P, VietGAHP…Organic farms to ensure food meets the standards of clean and international quality for users. Besides, the construction of farms has built businesses connected with processing plants and milk collection for dairy farmers.
According to preliminary data of the General Statistics Office on October 1, 2008, the whole country had a total of 128.6 thousand cows in 2010 and 2018 increased to 294.4 thousand children in 2018, with the average growth rate of 10.9% / year.
Milk production in 2010 reached 306.7 thousand tons, in 2018 increased to 936.0 thousand tons, an average increase of 15.0% / year for the period of 2011-2018. The average milk yield of the whole country in 2010 reached 3.0 tons / milking cow / year, increasing to 4.76 tons / milking cow in 2018, achieving an average growth rate of 5.7% / year. Milk prices purchased by businesses for farmers are always maintained at relatively high levels, from 12,000 to 14,000 VND / kg depending on the quality of each household’s milk.
Table 3 – Number of dairy cows and raw milk output in the period of 2010-2018 (* Statistics to October 1, 2018)
Along with domestic production, the import of milk and milk products in 2018 did not increase strongly. According to statistics from the General Statistics Office, the import turnover of milk and dairy products in 2018 increased slightly by 2.5% compared to 2017, estimated at 963 million USD.
Table 4 – Import turnover of milk and milk products in the period of 2010-2018
The growth rate of import turnover of milk and dairy products increased by an average of 3.9% per year for the period of 2010-2018. In which, mainly imported from New Zealand market, in general 11 months increased 27.39% over the same period to reach 260.36 million USD. Ranked second in turnover is Singapore, 11 months reached 125.6 million, up 10.37%. Imports from the US market only ranked third in turnover, but doubled compared to the same period (ie, 105.28%), reaching 112.32 million USD. In contrast, Vietnam dropped sharply from the Polish market, down 39.46%, equivalent to 19.16 million USD.
In 2018, some enterprises exported to 50 countries and territories, especially formula milk products exported to the US market. Total export of milk and milk products is estimated at US $ 300 million. In recent years, with the attention of the Government, ministries, many businesses have invested in expanding markets to countries in the region and Europe; continue to carry out trade promotion to export to regional countries and China.
Prospects in 2019 and the coming years:
It is forecasted that in the coming years, Vietnam dairy industry will continue to grow about 9-10% and reach 27-28 liters of milk / person / year in 2020. Milk consumption will continue to increase in the next few years due to increased people’s income and the development of modern sales chains. Demand for high-value dairy products is also expected to increase sharply due to the young population and the increasing number of middle class people in urban areas. These customers often need to experience new products, especially organic products, the trend of using nut milk products. The demand for butter and cheese will increase at a rapid rate. Condensed milk and yogurt are also milk products that are expected to have high consumption.
Every year, we still import nearly one billion USD of dairy products mainly from New Zealand because domestic supply is still in short supply. However, Vietnam’s dairy exports began to show signs of development. Typically, some businesses invest and expand markets to markets in the Middle East, Southeast Asia, Europe and even the United States and China.