As I write, a nice, gentle rain is falling outside our offices. This is just the third rain in about one month. Here in the US Midwest, we are suffering one of the worst droughts in decades. This drought is having a severe effect on crops, especially corn and soybeans. Both corn and soybeans reached historical highs today (19 July).
Earlier this year, we were very optimistic. US Farmers had planted one of the largest corn crops in history. We were hoping for a bountiful corn harvest and lower corn prices. But, man proposes and God disposes.
We hope and pray for rain but it may be too late to repair the damage this drought has already caused to the crops.
As I have explained in previous Pet Peeves, corn is one of the main factors in pet food pricing – even for pet food formulas that contain no corn. Soybeans are another major factors in pet food pricing. In fact, even grain-free formulas are directly affected by corn and soybean prices. This is because most livestock feed contains corn and/or soybean meal.
Expect major price increases for pet foods. We have heard from a number of sources that pet food prices will be increasing this third quarter of 2012. We estimate price increases of 10% to 15%. It could be higher. Some companies will increase prices all at once; other companies may increase prices incrementally. But the end result will be the same. Pet food pricing is going up – dramatically.