The United Nations Food and Agriculture Organisation (FAO) food price index (FFPI) has been on an upward trend since the middle of 2020, when it was as low as 92. In January this year it was up 1.5 points to 135.7.
Meat
The meat price index for all species was marginally higher in January at 112.8 points. This is a substantial increase, with the index up 16.6 points or 17.3%. The index reports beef prices reaching a new peak in January, driven by stronger global demand than supplies available.
Pig meat prices increased slightly, as increasing input costs cooled global supply, but prices of sheep and poultry meat were lower.
Dairy
For dairy it’s the fifth month in a row of price increases – with January at 132.1 points, up 3.1 on December – a 2.4% increase. This puts the dairy index 20.8 points or 18.7% higher than it was a year ago.
The biggest increases were for skim milk powder (SMP) and butter, with the demand driven by tightening of global supplies for trading, especially a reduction in milk being exported from western Europe. Production is expected to remain below average in Oceania in the months ahead, which is putting further pressure on supply.
Cereals
The cereal index was slightly higher than December at 140.6, an increase of just 0.1% on December, but 15.6 points or 12.5% higher than January 2021.
Wheat prices were 3.1% lower in January, with good harvests in Australia and Argentina. In contrast, maize prices were up 3.8% on December, driven by concerns about drought, particularly in Argentina and Brazil.
The sustained climb in the food index shows that global demand for agri-food products is keeping ahead of supply on a sustained basis. Beef prices are also looking good.
LSL News.