A decline in demand drove international bovine meat prices down in December, according to the latest Food Price Index report from the Food and Agriculture Organisation (FAO) of the United Nations.
The FAO Food Price Index (FFPI), published today (Friday, January 6) – which tracks the monthly changes in international prices of a basket of food commodities – shows that the meat price index in December dropped by 1.2% from November.
Specifically, the FAO Meat Price Index averaged 113.8 points in December, down 1.4 points from November, which was the sixth month in a row where a decline was recorded.
Meat prices
According to the FAO, international prices of bovine meat fell last month because of a higher supply of slaughter cattle in several large producing countries and “lacklustre global demand for medium-term supplies”.
Poultry meat prices also fell back as supplies remained steady despite production issues because of the impact of avian influenza (bird flu) outbreaks.
However, world pigmeat prices showed a strong increase primarily driven by pre-Christmas demand, especially in Europe.
Overall in 2002, the FAO Meat Price Index averaged 118.9 points, up 11.2 points from 2021, which was the highest annual average since 1990.
Dairy Prices
Separately, the latest FAO report also shows that the Dairy Price Index increased by 1.2% in December after five months of consecutive declines.
“Higher international cheese prices, reflecting tightening market conditions, drove the monthly increase in the index, while international quotations for butter and milk powder declined,” the report outlined.
The FAO Dairy Price Index averaged 139.1 points in December – up 1.5 points from November.
The report highlights that in December, international cheese prices rose, “reflecting a robust global import demand”, and also high internal retail and services sector sales, especially in western Europe.
However, international butter prices fell for the sixth consecutive month primarily because of “continued sluggish global import demand”.
Meanwhile, international milk powder prices also decreased slightly because of lower prices in western Europe.
In 2022 as a whole, the FAO Dairy Price Index averaged 142.5 points, up 23.3 points from 2021, and recorded the highest annual average on record since 1990.
Cereal Prices
The FAO Cereal Price Index also dropped in December by 1.9% from November as ongoing harvests in the southern hemisphere boosted wheat exportable supplies and strong competition from Brazil drove down world maize prices.
Over 2022 as a whole, the FAO Cereal Price Index hit a new record high of 154.7 points, which was an increase of 23.5 points on 2021.
The FAO report highlighted that the price index soared because of a “host of factors” including “significant market disruptions, increased uncertainties, higher energy and input costs, adverse weather in a few key suppliers, and continued strond global food demand”.
According to FAO chief economist Maximo Torero, although the index of world food prices declined for the ninth month in a row during December, the overall index for 2022 showed a rise in international prices of commonly traded food commodities.
“Calmer food commodity prices are welcome after two very volatile years,” the chief economist said.
“It is important to remain vigilant and keep a strong focus on mitigating global food insecurity given that world food prices remain at elevated levels, with many staples near record highs, and with prices of rice increasing, and still many risks associated with future supplies.”