Wisconsin agriculture may soon develop export opportunities to a country that has a special place in the nation’s history — Vietnam.
Ben Brancel, the state Secretary of Agriculture, Trade and Consumer Protection, recently returned from a trade mission to the Southeast Asian country, which has been reunified since 1975.
“They don’t talk about the war there. The country is run as a single entity from the capital of Hanoi (in what used to be North Viet Nam) but there is also a lot of trade activity in Ho Chi Minh City, which is the former Saigon.”
In his visits with government officials and with business leaders Brancel found that they want companies to be successful if they come there.
“This may be a new marketplace that can be expanded,” he told Wisconsin State Farmer in an interview just after his return to Wisconsin. “It was an exploratory mission — a chance to understand the Vietnamese economy and meet some key players.”
The trip came about, he explained, when Jennifer Lu, an international trade team member, applied for a grant from U.S. Livestock Genetics Export, Inc., a not-for-profit trade association that works for international market development.
Lu felt there could be opportunities for Wisconsin companies in Vietnam, which is the fastest-growing economy in Southeast Asia.
Wisconsin-based DeLong Company has already built business relationships there, Brancel said, selling distillers’ grains and food-grade soybeans. He found the country is also a good market for whey products and hides.
Wisconsin’s cattle genetics companies may also find some open doors in the country thanks to this trip. “We wanted to develop contacts and then share information with business in Wisconsin,” Brancel said.
Vietnam’s economy has been growing right around 6 percent a year, he said, compared to our domestic economy with growth of 1.5 percent. “That shows you the economic growth they are experiencing. Growth of disposable income has been rising too, across the board,” Brancel stated.
“We were informed that people there spend 80 percent of their money on food. We were very surprised at that figure. But as they earn more, they buy higher-value foods and better foods,” he explained.
Vietnamese people are not wealthy, but they are very price-conscious, Brancel found, and as a society in general, they like to upgrade to a better product if they can.
Brancel and Lu were in Vietnam for a week and while there they met with representatives of grain and food export organizations and with a regional representative of the U.S. Dairy Export Council.
Brancel commented, “We think there could be opportunities for dairy export growth.”
Government goal — increase milk consumption
In meetings with government agriculture officials, Brancel learned that it is a government goal to increase milk consumption — milk is regarded as a health food.
“That would accomplish two goals. It would make the country’s dairy farmers more prosperous and would make the people healthier.”
New Zealand, Australia and Israel have imported dairy cattle to the country and Nebraska has built strong relationships in the feed industry there. “They are spoken of very highly.”
Vietnamese people also consume a lot of pork and Brancel said he talked to officials about new protocols for importing live animals. There is a great deal of interest in upgrading the genetic base of the country’s hog industry.
While visiting a large soybean crushing business, which produces products for human consumption, Brancel heard that they were very happy with grains coming from DeLong Company, but had been dissatisfied with grains from India and other parts of the world.
Products coming out of that crushing plant go to feed people in North Korea, a country that is not on very good terms with the United States. “I found it very interesting that soybeans from Wisconsin, or cooking oil from those beans, ends up in North Korea.”
The soybean hulls are contracted to a large Vietnamese-owned dairy farm with 19,000 cows that is supported by Israeli technology. “They want to have 50,000 cows and they are looking to purchase 10,000 heifers from the United States.”
During a tour of the farm Brancel found that the facilities don’t include freestalls but pack bedding, which is agitated twice a day. The farm was using a pair of double-30 parallel milking parlors at the farm he toured.
The farm also has a state-of-the-art computer-controlled feed mixing station. “Once the feed is entered, the computer tells the mixer how many revolutions to make.”
The feed is then distributed by feed wagons we would recognize as ration mixers, he said. The herd was all Holstein-derived from Israeli and New Zealand genetics.
They produce about 50 to 60 pounds a day and all the milk is used for the fluid market.
There are nearly 28 million hogs in Vietnam — a country the size of New Mexico. A feed company that was on the tour produces specialty feed for the country’s native type of pig, one for hybrids and a different feed for superior genetic lines that have come from Nebraska.
The company also creates rations for oxen or water buffalo that are used for field work in rice paddies.
Animal genetics are positive opportunity
Brancel and Lu also visited a formerly state-owned dairy farm with 5,000 cows that was privatized 15 years ago. In addition to milking cows, the company that took over that operation processes cheese, butter, yogurt, a whey-based candy and fluid milk.
That company would like to replicate that operation at five other locations in the country and expand by selling heifers to farmers who would milk 100 cows on their farms.
The interest in dairy expansion and Wisconsin’s supremacy in dairy genetics leads Brancel to believe there could be an opportunity there for the state. “Animal genetics is a positive opportunity.”
The country produces only 22 percent of the milk needed to feed its people, he said. The rest is reconstituted from powder and that presents opportunities for whey products.
“Their need for dairy products is there,” he said. “And an expanded livestock industry means there will be opportunities for grains.”
Consultants have warned that when considering foreign trade, China isn’t the only market worth shooting for, said Brancel. “We’re being told not to put all our eggs in one basket.
“This may be a new marketplace that can be expanded. We think there are opportunities.
“They have 90 million people and have a 1 percent growth — 800,000 to 900,000 babies each year — and the median age of the population is 27 years.”
Brancel said he also wants to follow up on an industry that he hadn’t anticipated finding in Vietnam. “They are fantastic furniture makers and they are looking for lumber. We are going to find out what kind of form they can use it in and what kind of wood they need.”