The increase in the international prices of corn and soybeans, inputs used to produce animal feed, threatens to put upward pressure on the production costs of meat, eggs and dairy products.
Friday, January 29, 2021
In recent months, the international price of a bushel (27 kilos) of soybeans increased by 28%, from $10.6 to $13.62, between November 1, 2020 and January 28, 2021.
According to stock exchange data, for the period under analysis, the corn bushel went from $3.98 to $5.36, which is equivalent to a 35% increase.
Livestock farmers, a sector that demands animal feed made from corn and soybeans, are already beginning to perceive the increase in production costs caused by these variations in the price.
Romulo Chaves, president of the National Chamber of Pig Farmers of Costa Rica, told Nacion.com that "... the increases in corn and soybean prices began to be perceived in August last year, but the strongest escalation began in November."
Daniel Castillo, president of the National Chamber of Milk Producers, reported that "... according to the supplier of concentrate for animal feed, the price in Costa Rica has risen between 5% and 15% from November to date."
Costa Rican producers agree that the unusual demand from China, a country that is currently recovering strongly its livestock production, has caused corn and soybean prices to tend to rise in recent months.
If the same trend continues, businessmen estimate that the increase in costs will begin to be reflected in the prices paid by consumers for food of animal origin.
Because of the crisis generated by the covid-19, businessmen in the country estimate that due to the closure of shops, they are unable to sell an average of 200,000 bottles of milk per day.
According to the Association of Milk Producers of El Salvador (Proleche), national consumption has fallen in the last two weeks, a decline that can be explained by the home quarantine that has been decreed.
According to the sector's union, in 2017 consumption of milk and its derivatives reached 212 liters per capita, 33% above the level recommended by international health agencies.
According to the National Chamber of Milk Producers (Caprole), growth in milk production recorded in the country in recent years, is explained by an increase in domestic demand and a rise in exports to Central America and the Caribbean.
The guild has stated that producers are accelerating the shipment of cattle to slaughterhouses in order to increase production and take advantage of the increase in the international price of meat.
Meat prices in the international market have seen increases of up to 3% and 4% in recent months, positioning exports of meat products in second place of total exports.
The growing consumption of meat, eggs, dairy and grains is driving the agricultural industry which benefits from dietary changes at the global level.
The phrase "The protein business is a very good place to be right now," made in an article in The Wall Street Journal by a US pork producer reflects the boom being experienced by the agricultural industry around the world, thanks to changing trends in food consumption of animal protein products which are beginning to be used in place of carbohydrates in consumer's diets.
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