Prices

 

Higher priced agricultural products over the coming ten years, when compared to the pre-2007 decade, remain a distinct feature of this Outlook. The constellation of agricultural products and food prices have been on a higher plateau for several years as highlighted in the previous four Agricultural Outlook reports.

 

Near term prices adjusting

Commodity prices are currently high by historical levels. In the first years of this Outlook, crop and livestock prices are expected to diverge, reflecting different supply situations. Most crop prices are projected to fall in response to a rebound in production while reduced global livestock inventories allow only a limited supply response keeping meat prices high.

 

Prices firming over the medium-term

Rising prices for both crop and livestock products are projected over the coming decade due to a combination of slower production growth and stronger demand, including for biofuels, and a supportive macroeconomic environment. Meat, fish and biofuel prices are projected to rise more strongly than primary agricultural products.

 

Inflation adjusted prices remain high

Over the next decade, average prices for the crop complex (cereals, oilseeds, sugar and cotton) are expected to be relatively flat in real terms compared with the previous decade which included several years of record high prices since 2007. Average real prices for the 2013-22 period are projected well above the 2003-12 average for most of the other commodities covered in this Outlook.

 

Lower food price inflation

Recent evidence indicates that consumer food price inflation is currently abating in most countries, as lower prices of food grains, oilseeds, sugar and other products are passed through the food chain contributing to lower the “core” inflation. Nevertheless, with food expenditures accounting for 20-50% or more of household budgets in many developing countries, food affordability remains a main concern for food security.