Brazil's animal feed production costs are expected to increase this year by 3-3.5%, according to Ariovaldo Zani, executive VP of Brazil's National Animal Feed Industry Association, Sindirações.
Severe weather and crop failures in south Brazil and increased consumption demand are driving up corn and soybean meal costs and putting pig and poultry farmers on alert. Feed costs account for about 60% of Brazilian pig and poultry producers' total production cost. And soybean meal and corn account for about 80% of the feed consumed by pigs and poultry.
"The Brazilian animal feed industry depends on the food industry which, in turn, is modulated by domestic and international consumer demand," Brazil's National Animal Feed Industry Association said.
According to Brazil's National Animal Feed Industry Association, last year, 66 million tonnes of feed were produced, with 37.8 million tonnes going to poultry farms and 15.4 million tonnes going to pig farms. On poultry farms, 61% of the feed is made up of corn and 25% soybean meal, while pig feed is made up of 68% corn and 16% is soybean meal.
For corn, the average productivity in the southern region will be much lower than last season and even less than the average of the last 10 years which will increase the dependence on the winter corn crop.
Winter corn areas are expected to increase but it is too early to predict if that will equate into larger production.