The market scenarios for poultry and pork producer companies in the feed prices market have been challenging in recent years.
Significant price volatility occurred in central grain-producing countries such as Brazil and the United States.
This adverse condition impacted those countries that import most of their main feed ingredients, such as Mexico and the Andes region, including Ecuador, Chile, Peru, and Colombia.
Some ingredient price data collected by Agri Stats in the Americas from 2017 through 2023 will be discussed.
CORN AND SOYBEAN MEAL MARKET
In 2017, a ton of corn costed US$150, but by July 2023, this cereal reached a value of US$250 per ton (Graphic 1).
Graphic 1. Average corn price from 2017 to 2023 in four regions in the Americas.
Source: Agri Stats
The increment of $100 over six years increased the cost of live chicken by 11 cents per kilogram for Brazilian companies. The effect was worse in those Latin-American countries depending on importation, where 17% additional cost was observed.
A similar pattern was observed with soybean meal (Graphic 2).
Graphic 2. Average soybean meal price from 2017 to 2023 in four regions in the Americas.
Source: Agri Stats
In six years, the cost of this protein source increased by US$ 200 per ton. In 2017, the value was US$ 311; by July 2023, it reached a historic value of US$ 511. For the importer countries in the region, soybean meal arrived at their feed mills for $600 per ton.
During the years of record prices for soybean meal, soybean oil also recorded its highest value in 2022 in this six-year series. Producers’ response was to reduce this ingredient’s consumption and use more full-fat soybeans in feed formulation.
FEED COSTS
In 2017, broiler feed costs were around US$ 250 per ton; by July 2023, it had reached US$ 400 in Brazil and the United States (Graphic 3). For countries that import raw materials, feed in 2017 went from US$ 300 to $500 per ton, not counting the costs of manufacturing and delivering feed, which added up to 20 dollars per ton.
Graphic 3. Average broiler feed prices from 2017 to 2023 in four regions in the Americas
Source: Agri Stats
Several factors contributed to feed ingredient prices in recent years:
Increased production costs of inputs.
Inflationary scenarios.
Climate changes that impacted grain harvests.
The COVID-19 pandemic.
Soaring sea freight rates.
Higher oil costs.
The war between Russia and Ukraine.
And the change in production dynamics affected by the African swine fev...
