Something to Chew On
Getting your share
of the bounty
Petfood manufacturers worldwide have been dealing with
soaring prices for ingredients—especially grain-based
ones—for a couple of years. Is the situation likely to improve at all this year?
Not if corn is one of your key ingredients. According to the
Prospective Plantings report from the National
Agricultural Statistics Service of the
US Department of Agriculture (USDA),
US farmers are expected to plant 8%
fewer acres of corn this year (Table 1).
The 93.6 million acres planted in 2007
was the highest since 1944, as farmers
capitalized on the demand—and accompanying high prices—for corn to be
used for ethanol production. (See http://
usda.mannlib.cornell.edu/usda/current/
ProsPlan/ProsPlan-03-31-2008.pdf.
URL is case sensitive.)
Because of this demand, less corn
was available for food and petfood
production, and the price for what was
available escalated. At the end of March,
when the USDA report was released, a
bushel of corn was trading on the Chicago Board of Trade for US$5.60, up
from US$2 a bushel in 2006, according
to an article in the Chicago Tribune.
US corn farmers are
expected to plant 8%
fewer acres this year—
what does that mean
for petfood?
— Debbie Phillips-Donaldson
The flip side
It’s no wonder then, as an April 7 article in Time magazine pointed out, that
US corn farmers now sell 20% of their
crop to ethanol producers. Demand for
new food sources from an emerging
middle class in developing countries
like China and India plays a role, too.
The flip side for farmers is that growing corn is expensive because of the
need for intensive fertilization. Those
high input costs, along with the need to
rotate crop production in their fields, is
what will drive US farmers to plant less
corn this year, the USDA report says.
Another factor is that prices for other
crops, such as soybeans, are also rising.
It doesn’t hurt that soybeans are less
expensive for farmers to grow—thus,
the projected 18% increase in soybean
plantings this year (also in Table 1).
Table 1: 2008 US crop estimates
According to the US Department of Agriculture, US farmers plan to
decrease plantings of corn and oats and increase barley, rice, wheat and
soybeans. Acreage numbers are in millions.
Crop 2007 acreage 2008 estimate
Barley 4 4.1
Corn 93.6 86
Oats 3. 7 3. 4
Rice 2.76 2.77
Soybeans 63.6 74.8
Wheat 60.4 63.8
The wild card
Perhaps the most unpredictable yet
possibly significant influence on crop
production is the weather. In 2007 many
parts of the US, including its farmland,
were affected by drought. This year the
biggest problem is just the opposite:
heavy rains and flooding, especially in
the Midwestern US, where much of the
country’s corn is grown.
Despite all these issues and the projected decrease in this year’s plantings,
the USDA expects corn acreage to remain at historically high levels. Whether petfood producers will be able to get
their share—or afford it—remains to be
seen. ●
change
3%
-8%
-9%
0.4%
18%
6%
Phillips-Donaldson is editor-in-chief of Petfood Industry
magazine. E-mail her at dphillips@
wattnet.net.
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