Good news from the United Nations Food and Agriculture Organization today: High inventories of foods, including wheat, meat, and sugar, plus a strong US dollar, are expected to drive down food prices around the world in the coming year.
The world is awash in wheat and is likely to remain that way, the UN FAO said in its latest semi-annual Food Outlook report. The past two years have both seen record wheat crops, leaving exceptionally large inventories—and lower prices.
Global meat production is also expected to increase, with the FAO predicting a 1.3% rise in 2015, largely thanks to higher production of pork and poultry.
For the fifth year in a row, sugar production is expected only to “increase marginally,” but will still outpace consumption. Oil crop prices are also on their way down, largely due to record-high soybean production, combined with “only tepid demand growth.”
One important caveat to keep in mind: Many of the UN predictions “rest on the assumption of normal weather conditions.”
In April, the FAO Food Price Index, which measures the monthly change in international prices of a basket of food commodities, reached its lowest level since June 2010.