Written by: Constance Cullman | January 26, 2023
From Hanoi to Ho Chi Minh City, one cannot help but marvel at evidence of a rich and varied culture influenced by war, colonialism and communism. Overlaying all of this is intense growth fueled by a national commitment to economic liberalization and the desire to fully integrate into the world economy.
A couple weeks ago, a team of National Association of State Departments of Agriculture (NASDA) leaders* invited me to join them as their guest to meet with government and industry representatives throughout the country, and we witnessed Vietnam’s aggressive, rapid economic progress. Bumping up against double digit growth, Vietnam is the fastest growing economy in the world. Eager to come out of the shadow of its neighbors, the country is seeking to leverage its nearly 100 million people, young population (with 70% of its population under 40 years of age it is the number one market for Facebook), numerous trade agreements, low production costs and favorable geographic location to increase its standard of living and political security.
Nicknamed the “Switzerland of Asia” by the NASDA leaders on our trip, Vietnam knows it must walk a political tightrope. Entirely dependent upon oceanic trade, it is one of the most vocal critics of China’s incursions into the South China Sea but tempers its pushback to maintain political stability. An early recipient of Russian investment, it now finds itself modernizing its equipment to align more with the more efficient, Western systems. Meanwhile, as the United States’ seventh largest trading partner (while we are their most important market), and with a 96% approval rating of the United States among its population, Vietnam is eager to deepen our ties.
Saigon Port is a great indicator of Vietnam’s ambitions. Located near Vietnam’s southern major city, Ho Chi Minh City, in the Mekong River delta, it is a bustling container and bulk shipment port comprised of several companies, including U.S.-based SSIT. SSIT is expanding its capacity by 50% and shared the country’s plans to double the size of the overall port in the next two years and exceeding the size of the Port of Long Beach. With a large turning basin, the port is capable of handling Ultra Large Container Vessels (ULCVs) that can carry up to 20,000, 20 feet equivalent units (TEU) with a deadweight capacity of up to 200,000 tons.
Agriculture is a central part of the country’s plan for continued growth. With a strong push toward modernizing its agricultural system while balancing the needs of its small farmers, Vietnam is seeking to increase animal protein in its citizens’ diets, while becoming the region’s exporter of shrimp and poultry.
The government has taken aggressive efforts to control African swine fever (deploying its ASF vaccine), but has employed a softer touch by encouraging – rather than mandating – consolidation and modernization of its animal production industry. The result is currently 1,600 farms that produce 45% of Vietnam’s pork with the remaining produced by over 2 million farms. Feed manufacturing and demand for imported feed is growing with this emerging demand for quality feed rations as we saw in state of the art feed mills in both north and south Vietnam.
As a representative of the U.S. animal food industry, I was met with enthusiasm. Vietnam buyers are eager for U.S. feed ingredients, soy, corn and byproducts to improve the efficiency and quality of their feed and pet food production. Its growing pet ownership is creating a demand for quality pet food with increasing shelf space in the grocery aisle and the establishment of stores dedicated to pets’ needs. While the United States’ withdrawal from the Comprehensive and Progressive Agreement for Trans-Pacific Partnership in early 2017 places us at a disadvantage, Vietnam has signaled its willingness to negotiate better market access for U.S. products.
An emerging economy, there are still challenges. Vietnam’s anti-corruption campaign has slowed decision-making to a crawl, including decisions to initiate U.S.-funded development activities, although the campaign appears to be reassuring its citizens. Infrastructure investments are slow and unequally distributed. In economically hungry South Vietnam, where such investment would provide the greatest impact, infrastructure investment lags the slower growing North. Decent roads and rail are noticeably absent from bustling southern ports to the rest of the country, with most goods moving on barges while cumbersome import regulations slow imports.
With these observations in hand, I left Vietnam with even more conviction that this is a market with huge potential for the U.S. animal food industry. Fortunately, the American Feed Industry Association is a recognized name in Vietnam and is actively making progress to share the advantages of U.S. feed and pet food while navigating regulatory improvements that can facilitate trade. Aligned with these efforts are AFIA-sponsored educational sessions to help the Vietnamese livestock producer improve feed management and biosecurity efforts.
Diversifying our industry’s export opportunities by increasing the awareness of the role U.S. quality animal food in improving animal production and pet health is part of our path to industry resilience. Vietnam has put out the welcome mat – it’s up to us to decide if we want to come in.
Read more about our work in Vietnam on the AFIA Feed Bites blog.
*NASDA CEO Ted McKinney; NASDA President and Wyoming Director of Agriculture Doug Miyamoto; Delaware secretary of agriculture Michael Scuse; Washington Director of Agriculture Derek Sandison; Texas Deputy Commissioner of Agriculture Dan Hunter