FAO: Food Prices 40% Higher By 2019

Posted by Matt Hopkins|29 June 2010

PARIS — According to the OECD-FAO Agricultural Outlook 2010-2019, food prices could rise by up to 40% on growing demand in emerging markets, anticipated higher costs of energy-related inputs, and greater biofuel production. Jointly prepared by the Organization for Economic Co-operation and
Development (OECD) and the United Nations (UN) Food and Agriculture Organization (FAO), the report covers biofuels, cereals, oilseeds, sugar, meats and dairy products from 2010 to 2019.

The report projects average wheat and coarse grain prices increasing from 15%-40%; real prices for vegetable oils more than 40% higher; and dairy prices up by an average of 16%-45%. Ag commodities used in production of ethanol and biodiesel (vegetable oil, coarse grains, corn, sugar beet, wheat and sugar cane) are expected to increase strongly.

However, global agriculture output is forecast to meet the 70% increase in world food production that will be required to feed the estimated population of 9 billion people in 2050. Growth is expected to be led by Eastern Europe, parts of Asia, and Latin America — particularly Brazil, with agricultural output expected to increase more than 40% in that country by 2019. Production growth of more than 20% is expected in China, India, Russian Federation and Ukraine.