Originally posted on IFPRI.org
Written by Ashley St. Thomas

The latest FAO Food Price Index, released last week, fell nearly four points from July and nearly 11 points from August 2012. This was the fourth consecutive month in which global food prices dropped.

FEWS Net has issued an alert for East Africa, stating that a delayed start to the annual June-September rains is threatening harvests throughout the region. While rainfall has improved in recent weeks, FEWS estimates that normal rainfall would need to not only continue for the remainder of the season but extend past the normal rainy season in order for crops to fully recover. In large areas of Sudan, Ethiopia, and Eritrea, total rainfall has been 20-50 percent lower than average.

High food prices affect poor populations in a variety of ways. While households that only consume food suffer as a result of rising food prices, households that also produce food can actually benefit from price increases. But there is another, less recognized avenue through which high food prices can impact the poor: rural wages. The lion's share of the world's poor relies on agricultural jobs to make a living; whether or not agricultural wages increase as a result of rising food prices therefore has significant implications for how those price increases will help or hurt.

The USDA released its latest World Agricultural Supply and Demand Estimates (WASDE) report today. The WASDE report provides monthly comprehensive forecasts of supply and demand for major U.S. and global crops, supplied by the USDA. Crops covered include wheat, coarse grains, rice, and oilseeds. This report can explain past and current global commodities trends, as well as predict trends for the coming year. This month's report estimates 2013/2014 global wheat production at a record 705.4 million tons.

The latest FAO Food Price Index was released yesterday, and is down four points from June and seven points from a year ago. This is the third consecutive monthly drop and is due in large part to lower grain, soy, and oil prices.

The latest FEWS Net Monthly Price Watch was released last week, citing generally stable international staple grain prices.

As the global population continues to grow and become more urbanized, smallholder farmers will play a critical role in feeding the world. Despite their importance to global food security, however, these farmers face daunting challenges in the form of climate change, price volatility, limited access to credit and insurance, and inadequate access to nutritious food. And addressing these challenges effectively is complicated even further by the fact that small farmers have widely varying needs, advantages, and abilities.

The European Union could be on the road to more stringent biofuel regulations. In a hard-won compromise, the European Parliament’s Environmental (ENVI) Committee on July 11 voted to cap the transportation industry’s use of first-generation biofuels at 5.5% and to require reporting of the indirect land use changes (ILUC) caused by biofuel production. The vote also calls for countries and suppliers to promote the use of alternative biofuel sources, such as algae and straw.