Another dud warming prediction: crops boom and food prices fall

World food prices fell to almost a seven-year low at the start of the year on the back of sharp declines in commodities, particularly sugar, according to the latest data from the United Nations (UN). The Food Price Index, published by the UN's Food and Agriculture Organization (FAO), ... tracks international market prices for five key commodity groups -- major cereals, vegetable oils, dairy, meat and sugar – on a monthly basis... The main factors underlying the lingering decline in basic food commodity prices are "the generally ample agricultural supply conditions, a slowing global economy, and the strengthening of the U.S. dollar," the FAO noted... Signaling no let-up in production, the food agency raised its forecasts for worldwide cereal crops in 2016. "As a result of the upgraded production and downgraded consumption forecasts, world cereal stocks are set to end the 2016 seasons at 642 million tons, higher than they began," the agency noted.

With large harvests of wheat, barley and sorghum more than outweighed by a drop in the maize crop, world total grains (wheat and coarse grains) production in 2015/16 is estimated to be down by 2% y/y. However, because of large opening stocks, overall supply nearly matches the previous year’s record.