Policies, Institutions, and Global Initiatives

The latest FAO Food Price Index averaged 209 points in December, down 2 points from November and the lowest level seen since June 2012. The drop is due mainly to declines in grains and oils/fats. Overall, global food prices in 2012 were 7 percent lower than in 2011.

Cereal prices dropped 6 points in December, led by weaker demand for feed grain and larger maize exports from South America. Rice prices also dipped due to expectations of a good harvest.

As one of the world's most important staple crops, wheat plays a crucial role in the global agricultural economy and in global food security. The grain accounts for an estimated 20 percent of calories consumed throughout the world. But a burgeoning global population and changing climate are putting ever greater pressure on wheat farmers to produce bigger yields. A new multinational initiative, the Wheat Yield Network, has recently been launched to help raise global wheat yields and develop new wheat varieties that are better adapted to meet the world's changing needs.

The latest FAO Food Price Index was released today and is down three points from October's Index. This is the lowest point since June 2012. With the exception of dairy, all commodities covered by the Index fell in November.

The Cereals Price Index is down four points from October, but is still 27 points higher than it was in November 2011. Weakening global rice and wheat prices drove the fall and compensated for higher maize prices.

The Agricultural Market Information System (AMIS) has released the latest edition of its monthly Market Monitor. This month's report sees stabilized world markets as forecasts for 2012-2013 crop outlooks become more finalized. Despite this stabilization, however, attention should be paid to ongoing weather concerns, particularly drought affecting US winter wheat.

Wheat production in 2012 fell below the record seen in 2011, and ending stocks are expected to decline significantly. Wheat use, on the other hand, is expected to drop based on lower feed use in China and the EU.

The latest FAO Food Outlook finds that, on average, global food prices have been 8 percent lower during 2012 than they were in 2011. Global food import bills are forecast at USD 1.14 trillion, which is 10 percent lower than the record import bills seen in 2011.