Corn prices are skyrocketing in Brazil, and experts say this could impact the pet food industry since manufacturers rely on corn as one of the main plant-based ingredients.
What's happening?
As Petfood Industry reported, climate change, poor harvests, and soaring demand have led to significant pressure on corn prices. The crop accounts for 60% of the animal feed composition for swine, poultry, and cattle. It is also a crucial component of pet foods, providing a readily digestible source of protein and carbohydrates.
However, prices have seen considerable increases in recent months. The Center for Advanced Studies in Applied Economics reported that in March, corn prices climbed to their highest nominal value since 2022. Overall, prices of the grain have increased by 23% in Brazil this year.
Poor harvests are much to blame, as the availability of the crop at the start of the 2024/2025 harvest was just above 2 million tons — only 2.4% of Brazil's yearly corn consumption. Stores have struggled to keep shelves stocked amid the low supply, leading to higher prices in several areas.
While José Edson Galvão de França, executive president of the Brazilian Association of Pet Product Industries, stated that rice and soy could be used as replacements in pet foods, he noted that further price hikes can be expected.
"Inputs such as poultry, cattle, and swine have also suffered increases. Therefore, a readjustment for the final consumer is not ruled out," he told Petfood Industry.
Why are higher corn prices concerning?
Although several factors are at play, the overheating planet is causing massive crop failures in many locations, making groceries more expensive and forcing farmers to either diversify their crops or leave the industry due to significant losses. This has a ripple effect on communities worldwide, as the food supply chain operates through a complex network spanning multiple countries.
In Brazil, specifically, the increased price of corn hurts not only pets but also consumers, as it's an important ingredient in Brazilian cuisine and culture. As crops are wiped out by extreme weather and rising temperatures, ecosystems are also disrupted, making it difficult for animals and plants to survive.
The volatile climate has impacted mango farmers in India and Pakistan, the clove industry in Indonesia, and avocado farmers in Taiwan. Worldwide, barley, maize, and wheat are also experiencing significantly lower production due to hotter weather and lower moisture levels. All of this is to say, Brazil is far from the only country impacted by our rapidly changing climate, and the effects are far-reaching.
Is there a chance corn prices could decrease?
Petfood Industry explained that if the second corn harvest in the next several months proves successful, prices may go down a bit. But with rainfall and temperatures uncertain, farmers are holding onto their crops until the market sees another upturn.
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Price 💰 Meanwhile, farmers in Iowa have found that planting prairie strips alongside corn, wheat, soybeans, and other crops could significantly reduce soil erosion and promote healthier crops. Scientists are also working on genetic modification techniques that could enhance food security as the global population continues to grow.
With uncertainties in global food production, it's a good idea to plan ahead before grocery shopping to save money and reduce food waste. You can also explore apps such as Flashfood or Too Good To Go for groceries and restaurant food offered at highly discounted prices.
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