Vietnam’s Dairy Industry in 2026: Herd Expansion, Domestic Fresh Milk Self-Sufficiency and Investment Opportunities

Vietnam’s dairy industry is entering an important period of transformation. Domestic milk consumption continues to grow alongside rising income, stronger nutrition awareness, and a growing preference for products with clear origins. At the same time, the domestic self-sufficiency rate for fresh raw milk remains low compared with the demand of the dairy processing industry.

2026 is a notable milestone, as the Strategy for Dairy Industry Development through 2030, with a vision to 2045, has been approved. This strategy focuses on developing a complete dairy value chain, from expanding the dairy herd and increasing domestic fresh raw milk output to processing higher value-added dairy products.

This creates opportunities for businesses, investors, and dairy farmers who want to participate more deeply in the dairy value chain. However, to make the most of these opportunities, the dairy industry needs to overcome major challenges related to capital, breeding stock and genetics, feed, milk collection infrastructure, farming techniques, and cost control.

Overview of Vietnam’s Dairy Industry in 2026

Current dairy herd size and fresh raw milk output

According to several recent industry sources, Vietnam’s dairy herd in 2024 was estimated at around 326,000 head. Some other reports may give higher figures depending on the statistical method and update timing. Domestic fresh raw milk output reached more than 1.2 million tonnes per year and currently meets only around 40% of the dairy processing industry’s raw material demand.

Readers should refer to the latest figures from the Department of Livestock Production & Animal Health, Ministry of Agriculture and Environment, the General Statistics Office of Vietnam, or official dairy industry reports for updated year-by-year data.

Overall, domestic fresh raw milk output has increased over the long term thanks to improvements in breeding stock, genetics, farming techniques, and investment from major companies. However, the size of the dairy herd has shown signs of slowing during certain periods, while demand for dairy processing and consumption continues to grow.

Per-capita consumption of milk and dairy products in Vietnam remains lower than in many developed markets. Some recent sources estimate consumption at more than 30 kg per person per year, depending on the product scope included. This leaves important room for long-term growth in the dairy industry.

What is the current level of domestic milk self-sufficiency and import dependence?

Domestic fresh raw milk supply still does not fully meet processing demand. According to several recent industry sources, domestic fresh raw milk meets only around 40% of demand, while the remaining share still depends on imported milk powder and dairy products used for processing or reconstitution.

According to preliminary data from Vietnam Customs, the import value of milk and dairy products in 2025 reached around USD 1.44 billion. This shows that Vietnam still depends significantly on imported dairy ingredients and products, while also creating motivation to increase the share of domestic fresh raw milk in the coming years.

Key dairy farming regions: Moc Chau, Cu Chi, Lam Dong, and Nghe An

Vietnam’s notable dairy farming regions currently include:

Moc Chau, Son La: This area has a cool climate that is favorable for dairy cattle. The linkage model between companies and farming households in Moc Chau has been established for many years, helping develop a relatively stable milk supply area.

Cu Chi, Ho Chi Minh City: This is a key dairy farming area in southern Vietnam, serving the large consumption demand of Ho Chi Minh City and nearby regions. The farming model here involves many farming households linked with milk purchasing companies.

Lam Dong: The highland climate is suitable for dairy farming, especially in areas with cooler temperatures than lowland regions. This province has potential for developing high-tech dairy farm models.

Nghe An: This region has developed strongly thanks to its large land area, conditions for building milk supply areas, and the participation of major companies in the dairy industry.

It should be noted that calling these the “four largest regions” requires official ranking data for each year. Therefore, a safer expression is “notable dairy farming regions.”

The three biggest challenges the industry must overcome in 2026

First, feed costs remain the biggest pressure. Feed usually accounts for a large share of total milk production costs, while Vietnam still depends on some imported feed ingredients. Fluctuations in corn, soybean, oilseed meal prices, and logistics costs can directly affect farmers’ profit margins.

Second, Vietnam’s hot and humid tropical climate affects dairy cow productivity. Holstein Friesian (HF) cattle have high milk production potential but are less heat-tolerant in hot and humid conditions. Without proper cooling, ventilation, and nutrition management systems, cows are more likely to suffer heat stress, eat less, produce less milk, and face higher disease risk.

Third, the shortage of skilled labor and high infrastructure investment costs remain major barriers. Dairy farming requires skills in herd management, breeding, nutrition, disease prevention, milking, and milk quality control. This is a major obstacle for households that want to expand from small-scale farming to professional farm models.

Herd Expansion Strategy and Fresh Milk Self-Sufficiency Targets

National strategy directions for herd development and milk output

According to Decision No. 309/QD-TTg issued in 2026, approving the Strategy for Dairy Industry Development through 2030, with a vision to 2045, Vietnam aims to reach around 2.6 billion liters per year of domestic fresh raw milk by 2030, meeting around 60–65% of the domestic dairy processing industry’s demand.

This target is significantly higher than the current self-sufficiency level of around 40%. To move closer to this target, the industry needs not only to expand the dairy herd but also to improve average productivity, genetic quality, forage-growing areas, milk collection infrastructure, and linkages between dairy processors and farmers.

2026 can be seen as an important starting phase for assessing the implementation potential of the new strategy, although it should not be called a “mid-term checkpoint” unless this is clearly stated in an official document.

Genetic improvement plans: embryo technology, artificial insemination, and imports of high-yielding dairy breeds

Genetic improvement strategies in dairy farming are usually implemented through several parallel approaches.

First is the expanded use of artificial insemination with frozen semen from high-yield dairy breeds, helping improve milk productivity and the genetic quality of the herd.

Second is the application of embryo transfer technology in farms or breeding facilities with suitable technical capacity, helping multiply high-quality dairy cattle more quickly.

Third is the selective import of breeding cattle, semen, or genetic resources from markets with developed dairy industries, such as Australia, New Zealand, the United States, or Europe. Imports need to be accompanied by quarantine procedures, adaptability assessment, and appropriate genetic management for Vietnam’s climate conditions.

The gap between the current situation and the self-sufficiency target: is it feasible?

The gap between the current self-sufficiency level of around 40% and the target of 60–65% by 2030 is a major challenge, but it can be narrowed if investment in milk supply areas is maintained consistently.

One positive factor is that milk consumption demand still has room to grow. Major companies continue to expand milk supply areas, while the new policy has placed strong emphasis on developing a complete dairy value chain, from dairy farming to the processing of value-added products.

The key risk is that the growth rate of domestic fresh raw milk supply depends heavily on investment capital, genetic quality, feed costs, farming techniques, and the ability to maintain linkage models with farming households. If the industry relies only on large corporations, output can increase, but building distributed and sustainable milk supply areas remains a challenge that still needs to be solved.

Practical implementation steps and key bottlenecks to address

Three bottlenecks should be prioritized at the current stage:

Access to credit: Many small and medium-sized farming households do not have enough collateral or a clear enough financial plan to expand their herds with commercial interest rates.

Milk collection infrastructure: In some regions, the cost of transporting fresh milk from farms to collection points remains high, while fresh milk must be cooled and transported according to proper procedures to ensure quality.

Domestic forage and feed supply: Developing forage crop areas, improving forage and roughage quality, and reducing dependence on imported feed ingredients are key factors for controlling long-term costs.

Comparing Domestic Milk and Imported Milk in Vietnam

Comparison table: quality, cost, safety standards, and market share

Criteria	Domestic fresh raw milk	Imported milk powder used for reconstitution or processing
Origin	Dairy cows raised domestically	Imported from markets such as New Zealand, Australia, the EU, the United States, or other countries
Freshness	Has an advantage in the time from milking to processing if the cold chain is well controlled	It is not fresh raw milk; it has gone through drying, transportation, storage, and may be reconstituted or processed
Raw material cost	Under pressure from feed, breeding stock, labor, and infrastructure costs	Depends on global milk powder prices, exchange rates, and logistics costs
Quality control	Easier to trace if produced domestically under a linked value chain	Depends on supplier standards, exporting country standards, and import inspection in Vietnam
Current share	Around 40% of processing raw material demand	The remaining share still depends on imported milk powder and dairy ingredients/products
Trend	Expected to increase under the dairy industry strategy	The share may gradually decline if domestic fresh raw milk supply grows fast enough

Competitive advantages of domestic fresh milk over imported milk

Domestic fresh raw milk has a clear advantage in the time from milking to processing, especially when the cold chain is well controlled. As consumers pay more attention to products with clear origins, “100% fresh milk,” and farm traceability, this becomes a notable commercial advantage.

Domestic fresh raw milk supply also helps companies reduce part of their dependence on fluctuations in global milk powder prices, exchange rates, and international shipping costs. However, this advantage can only be fully realized when herd size, productivity, and milk collection infrastructure are strong enough to control costs.

Current weaknesses of domestic milk and the roadmap for improvement

The main weaknesses of domestic fresh raw milk lie in high production costs, uneven farming scale, differences in management quality between households, and incomplete milk collection infrastructure in some regions.

The improvement roadmap includes developing linkage models between companies and farming households, investing in on-farm cooling systems, standardizing milking procedures, controlling raw milk quality, and improving herd productivity through genetics, nutrition, and health management.

Consumer behavior trends in Vietnam toward domestic milk

Market observations in recent years show that Vietnamese consumers, especially urban consumers with middle-to-upper income levels, are increasingly interested in the difference between fresh raw milk and products reconstituted from milk powder.

However, without a large-scale consumer survey, it is not advisable to make a strong claim that the entire market has shifted. A safer way to describe the trend is: the growing preference for fresh, traceable, and high-quality products is creating additional advantages for domestic fresh raw milk.

Dairy Farming Costs and Real-World Economic Efficiency

Input cost structure: feed, labor, veterinary care, and infrastructure

Feed is the largest cost item in dairy farming. The exact share can vary depending on the farming model, milk sourcing region, feed prices, and each farm’s ability to produce its own forage.

In addition to feed, other important costs include labor, veterinary care, breeding costs, electricity and water, depreciation of barns, milking equipment, cooling systems, and waste treatment.

For farms using automatic milking systems, labor costs may decrease, but initial investment and equipment depreciation costs will increase. Therefore, economic efficiency should be calculated over the entire investment lifecycle, not only by looking at monthly operating costs.

Comparing milk production costs in Vietnam with other countries in the region

Fresh milk production costs in Vietnam are often under higher pressure than in countries with natural pasture advantages, such as New Zealand or Australia. This is because Vietnam depends more on industrial feed, barn cooling costs, and still has a smaller average herd size.

A specific comparison with Thailand, Indonesia, or other countries in the region needs to be based on specialized annual data. However, Vietnam’s general direction should not only be to compete on price with imported milk powder. Instead, the country should focus on fresh milk quality, traceability, value-added products, and a stable domestic supply chain.

Estimated economic efficiency and payback period by herd size

The estimates below are for reference only. The actual payback period depends on the price of breeding cattle, feed costs, milk purchase prices, herd productivity, infrastructure costs, and linkage conditions with companies.

For household models raising 20–50 dairy cows in a linkage chain with a purchasing company, the payback period may last for many years. Efficiency depends heavily on cow productivity, disease rate, purchase price, and feed cost control.

For medium-sized farms with 200–500 cows, economic efficiency may be better thanks to optimized labor, equipment, and operating processes. However, this scale also requires larger initial capital and more professional management capacity.

Industrial farms with 1,000 cows or more have the greatest potential for cost optimization, but they require very large capital, integrated technical systems, data management, waste treatment, and stable output channels.

Anyone with specific investment plans should work directly with purchasing companies, banks, technical experts, and local agricultural extension agencies to develop a financial plan that reflects real conditions.

Common financial risks and how to control them

Feed price volatility is the biggest and most difficult risk for individual farming households to control. Mitigation measures include proactively developing part of the farm’s own forage supply, signing long-term contracts with suppliers, or joining linkage chains that support input supply.

Disease risks, such as mastitis, foot-and-mouth disease, lumpy skin disease, and other infectious diseases, require serious investment in prevention, barn hygiene, and access control.

Milk purchase price risk can be partly reduced through long-term offtake or purchase contracts with processing companies. However, farmers still need to understand milk quality assessment mechanisms, purchase standards, and possible deductions if milk quality does not meet requirements.

Investment Opportunities in the Dairy Value Chain in 2026

Investment in dairy farming: models suitable for different investor groups

Individual investors or farming households with limited capital are usually more suited to household linkage models within the supply chain of a purchasing company. This model helps reduce output risk because milk is purchased under contract, while farmers may also receive technical guidance, quality standards, and milk delivery procedures.

Small and medium-sized business investors can consider building technology-driven dairy farms that supply raw milk and develop fresh dairy products at the local scale. This model requires careful assessment of output markets, processing capacity, and distribution systems.

Large investors looking for long-term business opportunities can consider an industrial farm model combined with a processing plant, allowing control of the entire value chain from breeding stock and genetics, feed, farming, milking, and processing to distribution.

Opportunities in dairy processing and high-value dairy products

High-value processed dairy products such as cheese, butter, yogurt, organic products, specialized nutritional products, or products designed for specific age groups may offer potential opportunities.

However, market size, profit margins, and competition levels need to be assessed for each specific segment. It should not be assumed that all “premium” products have high margins without considering raw material costs, processing technology, certification, marketing, and distribution systems.

Investors need to carefully study demand, certification costs, processing technology, and distribution channels before investing in high-value product segments.

Potential supporting sectors: feed, milking equipment, and veterinary services

As the dairy industry expands, supporting sectors also have room to grow. Demand for specialized compound feed, breeding stock, semen, genetic materials, milking equipment, cooling systems, herd management software, veterinary services, and waste treatment may all increase.

In particular, milking equipment, on-farm milk cooling systems, cow health monitoring sensors, and herd management software are promising fields if they come with after-sales service, maintenance, and operational training.

Major dairy projects and linkage models

Vinamilk, TH True Milk, and Moc Chau Milk continue to play major roles in developing milk supply areas, high-tech farms, and linkage models with farming households.

Some localities with land, climate, and milk sourcing potential are also interested in attracting investment in dairy farming. However, information about incentives, land, infrastructure, or public-private cooperation needs to be checked for each specific project. General claims should not be made unless there are official documents or announcements from local authorities.

Government Support Policies and Access Conditions

Credit programs and financial support for dairy farmers

Dairy farmers may be able to access agricultural credit programs, policy credit, or technical support depending on the locality, bank, and specific timing.

Support levels, loan conditions, documents, and interest rates need to be checked directly with banks, commune-level People’s Committees, agricultural extension agencies, or local agricultural authorities. It should not be assumed that all dairy farmers are eligible for preferential loans unless they meet the specific conditions of each program.

Tax incentives and technical transfer programs

Dairy farming activities, if classified as agricultural projects, high-tech agricultural projects, or investment projects in eligible incentive areas, may be considered for certain incentives under applicable laws and regulations.

The detailed conditions for application need to be confirmed case by case with tax authorities, relevant professional agencies, or legal consultants. The Ministry of Agriculture and Environment, the Department of Livestock Production & Animal Health, and the local agricultural extension system are key sources that farmers should consult when updating technical regulations, disease prevention requirements, and the latest support policies.

Conditions for accessing support and actual administrative procedures

To access support, farmers usually need to prepare valid land documents, business registration or livestock household registration as required, a specific farming plan, a waste treatment plan, and a disease prevention plan.

Actual procedures may vary by locality. Farmers should contact commune-level People’s Committees, agricultural extension agencies, or local agricultural authorities for guidance under current regulations.

Dairy Farming Techniques Suitable for Vietnam’s Conditions

Which dairy breeds perform well in a tropical climate?

Holstein Friesian (HF) cattle have high milk production potential under good farming conditions, but they are less heat-tolerant in hot and humid climates. This is a disadvantage that needs to be considered when raising them in lowland areas or regions with long hot seasons.

HF crossbred cattle with breeds that have better adaptability may produce less milk than purebred HF cattle, but they often have advantages in resilience, adaptability, and health management costs.

For most lowland and midland areas in Vietnam, the HF bloodline percentage should be selected based on barn conditions, cooling systems, management capacity, and productivity targets. In highland areas such as Moc Chau or Da Lat, HF cattle may perform better thanks to the cooler climate.

Checklist for nutrition management, herd health, and disease prevention

To maintain an efficient dairy herd, farmers need to carry out the following tasks:

• Build feed rations for each stage: lactating cows, dry cows, and replacement heifers.
• Ensure a clean, sufficient, and easily accessible water supply.
• Vaccinate according to the schedule recommended by local veterinarians.
• Conduct regular health checks and detect mastitis early using suitable methods such as CMT (California Mastitis Test).
• Keep herd records: milking dates, milk output, breeding schedule, and disease treatment.
• Clean barns, milking equipment, and milk cooling areas according to proper procedures.
• Control the movement of people, vehicles, and animals in and out of the farm to reduce disease risk.
• Monitor incoming milk quality, especially hygiene indicators and the purchasing standards of processing companies.

Digital technologies used in Vietnamese dairy farms

Several large-scale dairy farms in Vietnam have applied technologies such as automatic milking systems, herd management software, health monitoring sensors, barn cooling systems, and pasture management.

Automatic irrigation technology for feed-growing areas, temperature sensors, surveillance cameras, and software for managing individual cow productivity are also gaining more attention.

For medium and small farms, a more practical starting point is digitizing herd data, tracking breeding schedules, vaccination schedules, milk output per cow, and health status through simple software or management applications.

Frequently Asked Questions about Vietnam’s Dairy Industry in 2026

Can Vietnam achieve full fresh milk self-sufficiency by 2026?

Full fresh milk self-sufficiency by 2026 is not realistic. However, under the new dairy industry development strategy, Vietnam aims to reach around 2.6 billion liters per year of domestic fresh raw milk by 2030, meeting around 60–65% of the dairy processing industry’s demand.

This means dependence on imported ingredients may gradually decline, but cannot be completely replaced in the short term.

How much capital is needed to invest in dairy farming, and how long does payback take?

The required investment and payback period vary significantly depending on herd size, geography, investment timing, breeding cattle prices, feed costs, milk purchase prices, and linkage conditions with companies.

Those with specific plans should contact purchasing companies in their region, banks, technical experts, or local agricultural extension agencies to obtain estimates that better reflect actual conditions.

In general, linkage models with companies that provide offtake contracts help reduce output risk and make cash flow more predictable than selling milk on the open market.

What support does the State provide for new dairy farmers, and what are the procedures?

Support may include agricultural credit, technical training, agricultural extension support, or specific local policies. However, support levels and access conditions are not the same everywhere.

New farmers should contact commune-level People’s Committees, agricultural extension agencies, or local agricultural authorities for guidance based on current policies.

Can domestic fresh milk compete with imported milk in terms of price and quality?

In terms of quality, domestic fresh raw milk has advantages in freshness and traceability if it is produced within a well-controlled value chain. In terms of price, domestic milk is still under pressure from feed, breeding stock and genetics, labor, infrastructure, and herd size costs.

As herd size increases, productivity improves, and the supply chain becomes more optimized, the cost gap between domestic fresh milk and imported raw materials may gradually narrow.

What are the biggest risks when investing in dairy farming in Vietnam?

Four common risks include feed price volatility, herd diseases, milk purchase price fluctuations, and difficulty accessing capital for expansion.

The most effective way to reduce these risks is to participate in linkage models with companies that provide offtake contracts, control feed costs well, invest in disease prevention from the beginning, and keep complete herd records to manage production efficiency.

Where should investors start if they want to join the dairy value chain without raising dairy cows?

Opportunities are not limited to dairy farming. Investors can participate in areas such as feed supply, milking equipment, veterinary services, herd management software, milk collection logistics, dairy product processing, or product distribution.

These areas often require less capital than investing in a large-scale dairy farm, while still benefiting from the development of milk supply areas and the upgrading of the dairy value chain.

Outlook and Key Areas to Watch in 2027–2030

Forecasts for production growth and milk self-sufficiency over the next five years

Vietnam’s dairy industry is expected to continue growing during 2027–2030, supported by consumer demand, investment from major companies, and the new dairy industry development strategy.

Under the 2030 target, domestic fresh raw milk needs to reach around 2.6 billion liters per year and meet around 60–65% of the dairy processing industry’s demand. This is an ambitious target that requires synchronized investment in dairy herds, genetics, feed, milk collection infrastructure, processing technology, and linkage models.

Specific forecasts for output, herd size, and self-sufficiency rates should be cross-checked against official reports from the Department of Livestock Production & Animal Health, the General Statistics Office of Vietnam, or industry research organizations to ensure reliability.

Technology and sustainable production trends reshaping the industry

The two clearest trends are the application of digital technology in herd management and the development of sustainable farming.

Farms will increasingly need to better control production data, herd health, traceability, milk quality, waste treatment, and environmental emissions. The use of renewable energy, circular economy models, and livestock waste management may also become a long-term competitive advantage.

Milk buyers, processing companies, and consumers are paying more attention to these criteria, creating both pressure and opportunities for farms that move early toward responsible dairy production.

Export potential for Vietnamese milk and processed dairy products

Vietnam’s exports of milk and dairy products remain modest compared with countries that have long-established dairy industries. However, in the long term, as domestic fresh raw milk supply increases and processing capacity is upgraded, Vietnam may expand exports of higher value-added processed dairy products.

To compete in international markets, Vietnam’s dairy industry needs serious investment in quality standards, quarantine, food safety, traceability, and stable supply capacity.

In Summary

Vietnam’s dairy industry has a foundation for continued growth: market demand still has room to expand, major companies continue to invest, new policies have set clearer targets, and consumers are increasingly interested in domestically sourced products.

However, to move closer to the 2030 target, the industry needs to address several bottlenecks at the same time: expanding the dairy herd, improving productivity, controlling feed costs, improving genetics, standardizing milk collection, and building sustainable linkage models between companies and farmers.

The 2026–2030 period will be important for assessing Vietnam’s ability to increase its domestic fresh raw milk self-sufficiency rate and strengthen the competitiveness of its dairy industry.

Explore Dairy Industry Trends and Investment Opportunities at VIETSTOCK 2026

VIETSTOCK 2026 – Vietnam’s Premier International Feed, Livestock & Meat Industry Show – is expected to bring together more than 300 brands and 13,000 trade visitors from many countries, including providers of dairy cattle genetics, animal feed, milking equipment, herd management solutions, and dairy processing companies. This is an opportunity to:

• Gain direct access to providers of technology solutions, equipment, and services supporting the development of the dairy value chain in Vietnam and the wider region.
• Discuss solutions with technical and nutrition experts to improve herd productivity, control feed costs, and manage dairy cow health in tropical climate conditions.
• Connect with processing companies, distributors, and investors to explore opportunities across the dairy value chain, from farming and raw milk collection to value-added product processing.
• Stay updated on industry development directions and the latest policies to capture investment opportunities as Vietnam’s dairy industry accelerates toward its domestic fresh raw milk self-sufficiency target.

Time: October 21–23, 2026

Venue: Saigon Exhibition and Convention Center (SECC), 799 Nguyen Van Linh, Ho Chi Minh City.

Register now to seize opportunities for business growth and networking in the livestock industry:

Visitor registration: https://www.vietstock.org/en/online-registration-2/

Event website: https://www.vietstock.org/en/

Contact information:

• Exhibiting: Ms. Sophie Nguyen – [email protected]
• Group Delegation Support: Ms. Phuong – [email protected]
• Marcom Support: Ms. Anita Pham – [email protected]