Rising corn prices are pressuring food inflation in Brazil. The grain is one of the most used raw materials in animal feed composition, reaching up to 60% of the feed composition for cattle, swine, and poultry. In the pet sector, the impact on animal protein prices may also lead to increases in costs for producers and readjustments for the final consumer.
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Milho em alta: preços podem impactar o setor pet? Reajustes não estão descartados
According to the Center for Advanced Studies in Applied Economics (Cepea) of Esalq/USP, in March, the 60kg sack of corn reached the highest nominal value since the beginning of 2022, when prices were pressured by the war in Ukraine. The price of the grain approached R$90 in the partial of March in some producing areas, suffering a slight decrease until the end of the month. Last week, in the Campinas (SP) region, the quotation closed at R$ 87.87 per 60-kilo sack. In 2025, it accumulates an increase of 23%.
The consulting firm Datagro indicates the rise in corn as one of the factors considered for inflation above the target in 2025 – 3% with a margin of 1.5 percentage points more or less – which will mainly impact food prices. According to the consulting firm, corn may be responsible for an increase of up to 1.07 percentage points in food in the next 6 months.
Could the price of pet food increase?
The trend observed in previous years suggests that the increase in the price of corn may put pressure on the production costs of pet food, according to José Edson Galvão de França, executive president of the Brazilian Association of Pet Product Industries (Abinpet) and member of the Consultative Council of Instituto Pet Brasil.
According to the president, corn exerts moderate pressure on the costs of producing food for dogs and cats. "In Brazil, we have a considerable production of rice and soy, which allows corn to be replaced or partially replaced. It is possible to maneuver." However, the impact of the grain price on animal protein must also be considered. "Inputs such as poultry, cattle, and swine have also suffered increases. Therefore, a readjustment for the final consumer is not ruled out".
Corn price should continue to rise
Market analysts indicate that the upward trend in corn prices may continue in the coming months. Climatic and demand factors explain the rise in the grain and should remain throughout the coming months.
According to a survey by the National Supply Company (Conab), the availability of corn at the beginning of the 2024/2025 harvest was only 2.04 million tons, a level considered critical to meet domestic consumption. This amount represents only 2.4% of Brazil's annual consumption, which is estimated at 86.97 million tons. With limited supply, the market has faced difficulties in restocking, which has led to higher prices in several regions of the country.
This factor may change in the coming months, depending on the results of the 'safrinha', the second corn harvest, responsible for a large part of national production. However, weather conditions may still compromise prices. According to Conab, the uncertainty regarding rainfall and temperatures influences farmers' decisions, who are holding back sales and awaiting better market conditions.
Regarding the pet sector, the evolution of the 'safrinha' and weather conditions will be decisive in defining market behavior and how pet food production costs will be impacted.
