Live hog price hits VND 70,000/kg as a result of tight supply caused by the ASF epidemic, which contributed significantly to BAF Vietnam Agriculture Joint Stock Company (BAF)’s growth in Revenue and Profit.
On July 14, 2022, the purchase price of live hog continued to increase additional VND 7,000/kg to reach VND 70,000/kg. Currently, the trading price of live hog in 3 regions is around VND 54,000 to VND 70,000/kg.
From the end of April 2022 until now, live hog price has marked an increase of about 25%. The main reason comes from the African swine fever ASF outbreak in recent times, causing the total number of pig herds to decrease sharply. Many households were afraid of the disease so have sold off their pigs even when the pigs’ weight was not enough for slaughter. This leads to a sharp decrease in total pig herds and a shortage of market supply. Moreover, the disease has severely caused a reduction in the total number of sow herbs in Vietnam. It is difficult to re-herd when the breeding supply is limited. For that reason, the live hog price is expected to continue increasing because the supply from the re-herd is difficult when there is a shortage of breeding stock. In addition, the high price of feed has made live hog prices increase sharply every day recently. Besides, the price of live hogs in neighboring countries including China and Thailand also increased sharply, reaching the price level of VND 85,000 to 90,000/kg, which also affected the live hog price in Vietnam.
The small-scale husbandry model of households has faced many difficulties in recent times under the consequences of the strong increase in feed prices and the disease outbreak. Currently, the production cost of 1 kg of pork in a household has been up to VND 55,000 – 58,000 /kg, increasing nearly 45% compared to the previous time. However, this is a great opportunity for large-scale companies with modern livestock models, especially BAF Vietnam Agriculture Joint Stock Company (Company, BAF) which has the advantages of investing in the 3F closed model (FEED-FARM-FOOD) “from farm to dining table” to gain market share.
For BAF’s FEED part of the model, the product is researched by a team of leading experts to ensure optimal nutrition for each stage of livestock development, ensuring 3 NO: No prohibited substances – No colorants, lean – No weight gainer. The fully automatic feeding system with European technology contributes to the increase of pork’s quality, taste and the advanced waste treatment system contributes to the reduction of environmental pollution. Up to now, BAF is operating 2 BAF feed factories in Tay Ninh and a bran factory in Phu My with a total capacity of 260,000 tons/year. Since then, BAF can actively reserve feed and minimize the impact of the price fluctuation in recent times. In the first 6 months of 2022, 2 feed factories has provided 30,000 tons of feed, strong growth over the same period, ensuring food sources for the total herd of up to 130,000 pigs in the recent times.
BAF Tay Ninh Feed factory
The Company’s modern closed farm system (FARM) has applied the modern 4.0 model with international standards, allowing the traceability of food right from the farm with the purpose of supplying safe pork products into the market, complying strict disease control procedures, ensuring biosecurity and creating the best development conditions for livestock. With modern livestock farms, BAF has invested heavily in barn technology according to modern standards in the world. The technology systems has been transferred from the largest corporations in Europe and the US such as AP, Cristal, Skiold and Big Dutchman. Currently, BAF has put into operation 16 closed farms for pigs and breeding pigs throughout Vietnam, increasing the total pig herd to 130 thousand heads and rising to Top 5 in live pig market in Vietnam.
Modern barn system
Realizing the importance of providing clean and safe BAF pork products to consumers (FOOD), BAF is autonomous in its distributing channel when continuously expanding Siba Food food stores and Meat Shop counters nationwide. All the processing and transportation are strictly controlled to ensure that the pork meets the best quality standards. Up to now, BAF has developed more than 50 Siba Food stores and 250 Meat Shops concentrated in major cities across the country. The efficient operation of the distribution chain has boosted the output sharply in recent times. The volume of pork sold in the first 6 months of 2022 reached nearly 145,000 pigs of all kinds, increasing 3.3 times over the same period.
The optimization of the modern breeding model under the 3F model has achieved remarkable results when the Company can completely control production costs and can ensure the stable growth of the total herds. Live hog prices are expected to continue to increase in near future due to the impact of ASF as well as the supply scarcity. This shall greatly contribute to the growth of the Company’s Revenue and Profit in the coming periods.