Dairy cow farming needs to 'walk on two legs' to revive growth

Enterprises as a pillar of support

Dairy cow farming was once considered the "star industry" of livestock production, with periods of double-digit growth. However, since 2020, this growth momentum has slowed and even shown signs of decline, especially among farmer households.

At the workshop "Current Situation and Solutions for Restoring and Developing Dairy Cows" held on September 23, Mr. Nguyen Xuan Duong, Chairman of the Animal Husbandry Association of Vietnam (AHAV), warned that without timely adjustments, the industry may struggle to meet the targets set in the Animal Husbandry Development Strategy to 2030, with a vision to 2045.

In the 2010-2015 period, Vietnam's dairy cow herd grew at an average rate of 15.4%/year, with milk output surging by 17.7%/year. However, the growth rate halved in the 2015-2020 period and dropped to just 0.4%/year in the 2020–2024 period. Despite this slowdown, productivity has improved significantly, from 5 tons/cow/milking cycle to over 7 tons, placing Vietnam among the countries with the highest dairy productivity in the region.

This rise in productivity has been partly driven by major corporations such as TH and Vinamilk, which have advanced intensive farming practices. At the same time, farmer households have gradually exited the industry amid a surge in imports. The volume of milk powder and dairy products entering Vietnam has grown by an average of 8–12%/year, peaking at 20% in some years. This overheating of the market has made it difficult for domestically produced fresh milk to compete.

The Covid-19 pandemic further pushed production costs higher, while enterprises showed little appetite for procurement, leaving farmer households struggling. Many of these households produce only 13–15 liters of milk/cow/day, far below the 30–40 liters achieved on large-scale farms. These households also lack specialized veterinary services, forcing them to sell off sick cows at a loss.

Mr. Luong Duy Toan, General Director of Ho Toan Company, which raises 2,000 dairy cows in Tuyen Quang, said that the current purchasing price of raw milk is just VND 13,000–14,000/liter, compared with around VND 20,000 in Thailand and Malaysia. "Farmers are earning a profit of barely VND 1,000/liter, far too little compared to the capital needed to invest in dozens of dairy cows," Mr. Toan said.

To revive the dairy cow herd, Mr. Nguyen Xuan Duong proposed five key solutions. The first is to seek output for milk products and build a clear competitive advantage for Vietnamese dairy. Second, the industry needs to "walk on two legs," combining concentrated farming with professional farmer households of 30–50 cows.

Third, farmers must be closely linked with processing enterprises. "Each cow produces around 20 liters of milk per day, so enterprises must serve as the pillar supporting milk consumption," said Mr. Duong.

Fourth, agricultural by-products should be fully utilized as feed to cut costs. Finally, dairy cow development must be placed within an overall national strategy, with the participation of the Ministry of Industry and Trade, the Ministry of Health, and other relevant ministries and sectors. This is an urgent task.

According to statistics in 2024, Vietnam had an average of just 3.3 dairy cows/1,000 people, half the level of Taiwan and South Korea, one-third that of Thailand and Japan, and just a quarter of Israel. The country still lags far behind the Netherlands, which boasts 86 cows/1,000 people. Under the 2030 target, Vietnam aims to be 60% self-sufficient in fresh milk, and by 2045, per capita milk consumption is expected to reach 100 kg/year. These goals will be extremely difficult to achieve without bold actions.

Mr. Duong affirmed that restoring the dairy cow herd cannot be rushed. "It takes one year to rebuild poultry flocks and three to five years for pigs. Meanwhile, dairy cows need decades to recover," he explained. Dairy cow farming is not just about breeding or barns, but the integration of capital, technology, management, markets, and policy.

Focusing more on productivity

Vietnam's dairy cow herd has not declined in number, yet its growth rate is slowing, which is considered a paradox. According to Mr. Pham Kim Dang, Deputy Director General of the Department of Livestock Production and Animal Health, the legal framework for livestock farming is now fairly complete, with five development projects, Decree 106, and the amended Land Law allocating land for concentrated livestock production. Particularly, dairy cow farming is one of the few industries that has successfully built a linkage chain, from production and purchasing to processing and distribution.

Mr. Dang acknowledged that there remains a significant gap between policy and practice. Small-scale dairy cow farming households are declining rapidly, while enterprises wishing to expand face land-related barriers. At the local level, many authorities still struggle to clearly understand concentrated livestock farming. The reduction of the dairy cow herd in Ho Chi Minh is therefore understandable, as land has been prioritized for infrastructure development and urban economic growth.

Market demand presents another challenge. Major enterprises require an increasing volume of raw materials, but domestic farmers find it difficult to meet both quality and quantity requirements. Instead of focusing solely on herd expansion, Mr. Dang recommended prioritizing productivity. "We are limited by land resources, so enhancing productivity through good breeds and effective herd management is more realistic than chasing numbers," he explained.

Breeding programs have achieved some progress, with locally bred HF cows showing positive selection results. However, replicating and maintaining genetic quality still require a more systematic approach. At the same time, many consumers still fail to distinguish between UHT fresh milk and reconstituted milk. The solution is to step up public communication so that consumers are better informed, ensuring transparency and fairness in the market.

According to Mr. Dang, to ensure the sustainable development of dairy cow farming, it is essential to reorganize farming household groups into more structured units capable of meeting the increasingly stringent requirements of both enterprises and the market.

The Ministry of Agriculture and Environment is currently synthesizing local feedback to adjust targets and development directions for the dairy cow industry to better reflect practical conditions. "Expanding the total herd is not the only measure of development. The focus should be on productivity and efficiency, while also removing land-related barriers for enterprises and strengthening the chain linkage with farmer households. Only then can the dairy cow industry follow the right path," Mr. Dang emphasized.

However, the trend of young people losing interest in agriculture is growing stronger, not only in Vietnam but also in developed countries, where most dairy cow farms are increasingly operated by older generations. This poses a long-term problem in terms of both human resources and support policies for the dairy cow industry to develop steadily in the coming decades.

Mr. Ngo Minh Hai, Chairman of the Board of Directors of TH Group, stated that expanding the dairy cow herd is an inevitable trend to establish concentrated farming and ensure economic efficiency. Yet for smallholders, capital and labor barriers make this goal difficult to achieve.

According to Mr. Hai, Vietnam can adopt a flexible approach to the target of 500,000 dairy cows. With high-performing breeds producing over 30 liters of milk/cow/day, around 350,000 heads would suffice to meet raw milk demand. The key is improving quality.

*USD 1 = VND 26,198 (Source: Vietcombank)