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22 July 2014 | Will Green
Prices for crops and animal products are projected to decline over the medium term globally, according to a report by the OECD and the UN Food and Agriculture Organization (FAO).
The OECD-FAO Agricultural Outlook 2014–2023 said prices for major crops were expected to continue falling over the next two years before stabilising at levels above the pre-recession period, “but below recent peaks”.
Meat, fish and dairy costs are predicted to rise, with beef prices “rising to record levels” and poultry “overtaking pork to become the most consumed meat product over the outlook period”.
However, the report said though meat input costs would rise, “in real terms meat prices have already, or will soon, peak, and will decline moderately by 2023”.
“Crop prices are expected to drop for one or two more years before stabilising at levels that remain above the pre-2008 period, but significantly below recent peaks,” said the report. “Meat, dairy and fish prices are expected to rise. In real terms, however, prices for both crops and animal products are projected to decline over the medium term.”
The report said demand for agricultural products would “remain firm while expanding at lower rates than in the past decade” and while “cereals are still at the core of what people eat, diets are becoming higher in protein, fats and sugar in many parts of the world, as incomes rise and urbanisation increases”.
The report said such changes “will require substantial expansion of production over the coming decade” and, led by Asia and Latin America, “developing regions will account for more than 75 per cent of additional agricultural output over the next decade”.
OECD secretary-general Angel Gurria said: “Agriculture markets are returning to more settled conditions after a period of unusually high prices. This has been helped by governments showing restraint in the use of trade measures. But we cannot be complacent. We must do more – on trade, on productivity, and to tackle poverty. Governments should provide social protection for the most vulnerable, and develop tools to help farmers manage risks and invest in agricultural productivity. Achieving gains in ways that are both inclusive and sustainable remains a formidable challenge.”
FAO director-general José Graziano da Silva said: “This year’s outlook is favourable, if we compare it with the turbulent past few years of high and volatile food prices. Farmers around the globe responded to high food prices with a strong supply, and as a result crop prices are expected to be comparatively flat this decade. Agriculture has to provide not just more food for human consumption, but also raw material for industrial purposes, such as biofuels and animal feed.”