Brazil Braces for Another Year of High Food Inflation Amid Drought Crisis
Brazilian consumers may face high food inflation as meatpackers struggle with increased costs due to a drought affecting livestock feed crops.
Image by Markus Spiske
Brazilian consumers may face another year of high food inflation as meatpackers struggle with increased costs due to a drought affecting livestock feed crops. The meat industry group ABPA predicts that prices will remain high until Brazil's mid-year corn harvest. Companies like BRF SA and JBS SA might need to import cereal due to a weaker domestic harvest outlook. Private analysts have lowered crop forecasts due to hot and dry weather in southern states. Rising meat prices in 2021 contributed to overall food inflation and the highest consumer price index since 2015. Meat processors, such as Aurora, are considering importing corn from Argentina or Paraguay if Brazilian corn prices continue to rise. The smaller-than-expected first corn crop will likely pose challenges for the meat industry in the first quarter.
