Vietnam's current population is close to 100 million, and its economy has maintained medium-to-high growth for a long time, and residents' animal protein intake has continued to increase. The Animal Husbandry Department of the Ministry of Agriculture and Rural Development of Vietnam has proposed a goal of more than 7.89 million tons of meat production in 2024, a year-on-year increase of 3.8%; among them, pork production reached more than 4.87 million tons, a year-on-year increase of 4.0%. Poultry meat production reached 2.31 million tons, an increase of 3.1%; under the long-term growth of breeding stocks, Vietnam's industrial feed production also maintained a step-by-step growth. According to data from the Statistics Bureau of Vietnam, Vietnam's feed production in 2023 will be about 23.93 million tons, with a compound growth rate of 3.13% during 2017-2023. According to USDA data, in 2023, the proportion of breeding sows in large-scale livestock and poultry breeding enterprises in Vietnam will increase from 12% in 2018 to 34%. Scaling has become an industry development trend, driving the growth of industrial feed demand. Referring to the increase in the penetration rate of industrial feed in the scale-up process of China's pig breeding industry, Vietnam's feed is expected to open up long-term growth space.
The Vietnamese feed industry is relatively fragmented, dominated by multinational feed companies, and integrated development companies have obvious advantages. In the past, the feed industry was relatively fragmented under the breeding structure dominated by family farmers, and multinational feed companies occupied the Vietnamese industrial feed market. On the one hand, Vietnam's feed raw materials are highly dependent on imports, and policies support foreign direct investment (FDI) companies to participate in market competition, which is conducive to guiding the healthy development of the industry. On the other hand, compared with local small-scale feed companies, foreign-funded enterprises have obvious competitive advantages in product quality and stability. At the same time, some companies extend to the upstream and downstream of the industrial chain, compressing the living space of family farmers, the main customers of small and medium-sized feed companies, and the market share of feed business is expected to continue to maintain.
At present, the penetration rates of livestock and poultry and ruminant feed and aquatic feed in Vietnam are 69% and 57% respectively. In the future, with the continuous improvement of population and consumption capacity, the level of animal protein intake of Vietnamese residents will increase, the number of breeding stocks will increase, and the scale and specialization of breeding will promote the penetration rate of industrial feed, while the feed coefficient will remain stable. We assume that in the next five years, the penetration rates of aquatic feed, livestock and poultry, and ruminant feed in Vietnam will increase to 60% and 72% respectively, while the density of aquaculture will increase to 5.8 tons/hectare, and the scale of livestock and poultry farming will increase by 6% compared with 2023. The demand for feed in Vietnam will reach 27.38 million tons in 2027, an increase of 14.4% compared with 2023.
Investment advice: As a populous country, under the influence of terminal consumer demand and cyclical fluctuations in agricultural product prices, the scale and degree of specialization of Vietnam's breeding industry still have room for improvement, driving the continuous expansion of the industrial feed market. With the support of feed formulation technology, processing technology and quality control system, overseas companies are expected to continue to maintain their market share. It is recommended to pay attention to the layout of the Vietnamese feed market and the leading domestic feed companies with comprehensive competitive advantages.