Opportunities in the Dairy Business Shine Brightly

Vietnam's dairy farming sector is poised for growth, but faces challenges in achieving self-sufficiency and competing on the global stage. The industry, currently small in scale and heavily dependent on imported milk powder, is grappling with an overheated market, supply chain disruptions, and increased production costs due to the COVID pandemic.

According to Ngô Minh Hải, Chairman of the Supervisory Board of TH Group, Vietnam's dairy herd is expected to reach 1 million heads by 2030. To achieve this, TH Group has proposed two scenarios: high-tech large-scale dairy farming with 700,000 cows, or household-based farming with 1.2 million cows.

The country's dairy sector has made progress in output, quality, and distribution systems over recent years. However, the growth rate of raw fresh milk production has declined steeply, from 17.7% per year from 2010 to 2015, to 3.3% annually from 2021 to last year.

To address these challenges, a comprehensive strategy is needed, including livestock breeding, technology investment, and farmer support policies. Hải has proposed incentives such as a zero-per cent VAT for domestically supplied raw fresh milk, subsidies for investors in high-tech dairy farming, and support for farmers participating in high-tech production value chains.

Science and technology are transforming the dairy industry, particularly in areas such as biotechnology, housing systems, nutrition, breeding, and digital solutions. TH Group's high-tech dairy farm cluster in Nghệ An Province is one of the leading concentrated dairy operations globally, with nearly 70,000 cows raised on previously barren land.

Vietnam's goal is to reach around 60% self-sufficiency in fresh milk after 2030 and raise per capita dairy consumption to about 100 kilograms per person per year by 2045. To achieve this, the country needs a well-planned trade promotion strategy for its dairy products, especially organic milk, pure fresh milk, and specialised nutrition products.

Building a strong dairy brand based on quality, safety, and sustainability will enhance Vietnam's position in global markets. If the current trend continues, Vietnam may miss its target of 2.6 to 2.8 million tonnes of fresh milk by 2030 and fall short of achieving 60% self-sufficiency in milk supply.

Government agencies should improve the legal framework, provide clear, consistent quality standards and regulations, and encourage companies to use locally produced fresh milk. Dương, chairman of AHAV, recommends planning dairy farming zones in concentrated areas linked to green feed sources to reduce transport costs, ensure stable feed availability, and improve disease control.

Research and technology application should be strengthened in both farming and processing. Local consumers are missing out on the nutritional value of fresh milk due to the reliance on imported milk powder. With its natural and economic conditions, Vietnam is better positioned for dairy farming than countries like Japan or Israel.

The aim of the draft Strategy for the Development of the Dairy Industry to 2030 with Vision to 2045 is to promote sustainable fresh milk production, ensure food safety, raise public awareness, and support the localisation of the dairy sector. With a clear national strategy, Vietnam's dairy industry could increase domestic supply to meet 70 per cent of demand by 2035.