Seven challenges facing Vietnam's dairy cattle industry

Vietnam Large Cattle Breeding Association recently hosted the Vietnam – United States Dairy Cattle Innovation Workshop on April 16 in Hanoi City. According to Tong Xuan Chinh, Deputy Director of the Department of Livestock Production and Animal Health under the Ministry of Agriculture and Environment, Vietnam’s total dairy cattle herd has experienced relatively stable growth over the last 10 years, averaging an increase of 4.6 percent per year. This figure rose from 228,000 heads in 2014 to approximately 335,000 heads in 2024. The total output of raw fresh milk has nearly doubled to reflect the considerable growth in productivity, with an annual growth rate of nearly 8.4 percent. Similarly, this figure rose from 550,000 tons in 2014 to more than 1.2 million tons in 2024.

The aforementioned growth reflects the highest level of privatization and industrialization within the country’s dairy farming sector, complemented by systematic investments from major dairy companies such as Vinamilk, THmilk, and Moc Chau.

However, according to Deputy Director Tong Xuan Chinh, per capita milk and dairy product consumption in Vietnam remains at a low level—approximately 27 to 28 liters per person per year—compared to global averages. Domestic raw fresh milk production currently meets only 40 percent of local demand, prompting Vietnam to raise the value of its imports of milk and dairy products from 849 million USD in 2016 to an estimated 1.129 billion USD in 2024, with an average annual growth rate of 3.6 percent. The majority of imports are various types of milk powder originating from different countries, including New Zealand, European nations, the United States, and Russia.

As a result, the domestic dairy cattle industry can expect to face seven major challenges in the near future, namely: low domestic fresh milk output, strong competition, price competitiveness, high marketing costs, legal barriers, market volatility, and supply chain challenges.

The industry must adopt a comprehensive range of solutions in response to these obstacles. Accordingly, it should focus on implementing targeted support measures through the national agricultural extension system to assist dairy farmers in acquiring high-yield cattle breeds and modern farming equipment and improving feed management. These measures may include low-interest loans, tax reductions, and direct payments based on milk quality and productivity.

In addition, the industry should promote the establishment and funding of national breeding programs, focusing on the development of dairy cattle breeds suitable for Vietnam’s climate with high milk production potential. Possible solutions include artificial insemination services, embryo transfer, and genetic improvement initiatives.

On the other hand, the industry must also review and adjust land-use policies to facilitate the allocation, conversion, and leasing of land suitable for large-scale dairy farms. This process may involve streamlining land recovery procedures and offering long-term land lease contracts. Stakeholders should also direct investments toward infrastructure that supports dairy farming, such as improving transportation networks, ensuring stable electricity supply, and providing access to clean water in rural areas.

In addition, the industry should expand and enhance existing training programs for dairy farmers, with a focus on modern farming techniques, animal health management, and sustainable practices. It should also improve agricultural extension services to provide ongoing support and guidance. Notably, local authorities should encourage the formation of dairy farming cooperatives to improve bargaining power, access to resources, and knowledge sharing among farmers.

According to the General Department of Customs, Vietnam spent approximately 1 billion USD on milk imports between 2018 and 2020. Notably, the import value of milk and dairy products reached 1.138 billion USD in 2021, marking an increase of 12.56 percent compared to 2020.

On average, domestic milk production in Vietnam provides 12 liters of fresh milk per capita, with total milk consumption estimated at 28 to 30 liters per person per year. In contrast, the global average stands at 106 to 107 liters per person annually.

Vietnam currently houses more than 28,000 dairy farms and households raising dairy cattle, with a total herd of nearly 375,000 cows. The country produces over 1.2 million tons of fresh milk, meeting only 42 percent of domestic consumer demand.