{"id":14491,"date":"2012-06-09T11:11:00","date_gmt":"2012-06-09T17:11:00","guid":{"rendered":"http:\/\/wordpress-367309-1145705.cloudwaysapps.com\/?p=14491"},"modified":"2012-06-09T11:11:00","modified_gmt":"2012-06-09T17:11:00","slug":"mixed-messages-in-the-latest-data-in-the-fao-food-price-index","status":"publish","type":"post","link":"https:\/\/sustainablog.org\/articles\/mixed-messages-in-the-latest-data-in-the-fao-food-price-index\/","title":{"rendered":"Mixed Messages in the Latest Data in the FAO Food Price Index"},"content":{"rendered":"
<\/a><\/p>\n On Thursday (6\/7\/12), the\u00a0Food and Agriculture Organization of the UN<\/a>\u00a0(FAO) released it’s indices for food prices in international trade. \u00a0Most of the news coverage was upbeat because May showed the largest drop in some time. \u00a0For instance, the allAfrica website had a headline, “FAO Food Price Index Drops Sharply.” \u00a0It was a 4% drop; however that comes after several months where the index stayed flat and failed to show the sort of major correction that occurred after the last spike (2007-9). \u00a0Even with the drop in May, the index is still nearly as high as it’s highest level in that previous spike.<\/p>\n Perhaps I’m doing some “glass half full” thinking, but what concerns me is that May’s drop comes mainly from changes in only two of the components. \u00a0There was a serious drop in the dairy component of the index which really dominates the overall story for May (see graph below).<\/p>\n <\/a><\/p>\n Indeed, the dairy index is dropping at exactly the same rate as it did in the last correction – just a few months later. \u00a0Some news sources<\/a>\u00a0highlighted this contribution, but not most.<\/p>\n Sugar also dropped quite a bit over the past two months, but neither sugar or dairy are “typical” in terms of their pattern vs other important commodities.<\/p>\n <\/a><\/p>\n What concerns me is that the cereals index (see below) is so stubbornly high. \u00a0It’s drop in May was really quite insignificant and does not even undo the increase that occurred in April. \u00a0These are prices that make life very difficult for grain dependent, poor nations around the world.<\/p>\n <\/a><\/p>\n The meat index, which exhibited the most dramatic spike in 2010-12, shows little sign of correction at all.<\/p>\n