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Farmers switch to dairying on milk price spike
30 | 07 | 2007
Agriculture management authorities are concerned over farmers’ race to raise dairy herds after the price of fresh milk has rocketed over the past two months.
Nguyen Phuoc Thao, director of the HCM City Department of Agriculture and Rural Development, has sent letters to relevant agencies and localities asking them to warn local farmers against the rush. Thao said that farmers who are raising dairy cows should select productive breeders and reduce production cost because high prices of input materials may cause losses for them.

Over the past two months, Vietnam's leading dairy production companies, including HCM City-based Vietnam Dairy Products Corp (Vinamilk) and Dutch Lady in Binh Duong Province, have raised fresh milk purchasing prices from 4,500 to 6,400-6,500 dong per kilogram, an increase of 44% year-on-year.

The rising prices have stimulated local farmers to raise cows again after a quiet time, causing a hike in prices of milk cow breeders.

Nguyen Dang Vang, head of the Animal Husbandry Department, admitted that farmers in many provinces that announced bankruptcy due to losses in milk cow raising more than a year ago were preparing to raise the cows again. "They should not forget the lesson in the past," he said.

In that context, some dairy companies have announced plans for adjusting the prices of their products in the next few months after suppliers increased the prices of materials.

Le Viet Ha, chair of Hancofood Company, said that Hancofood imported milk from New Zealand at a price of US$2,700 a tonne late last year, but the price has now soared to US$5,700 a tonne. "The high milk price has forced us to raise the price of milk products by as much as 5% since early this month. However, we will adjust the price again at the end of September this year after signing a new contract with the supplier," Ha said.

Tran Bao Minh, deputy general director of Vinamilk, told the Daily yesterday that dairy companies in Vietnam would have to adjust the price of dairy products to avoid losses.



Intellasia News Online

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