Global food prices for May published by the United Nations Food and Agriculture Organisation (FAO) show that while the overall index level dropped, some dairy and meat prices were at all-time highs.

The headline index level of 127.7 points for May was a 0.8% decline from the previous month and 18% below the all-time high recorded in June 2022.

Digging into the details for the month, the meat and dairy sub-indexes both showed increases while there were declines in cereals, vegetable oils and sugar prices (see Figure 1).

In its commentary on the results, the FAO said that international butter prices remained at historically high levels, sustained by strong demand from Asia and the Middle East amid tightening supplies from Australia.

It did cite a slowdown in butter demand in the European Union as a possible headwind to further rises. Cheese prices were also higher, driven particularly by food service demand in East and Southeast Asia.

The FAO said there was evidence of tight cheese supplies in the EU due to adverse weather and disease outbreaks earlier in the year.

Skim milk powder prices remained under pressure as there were ample supplies from butter-producing regions.

On the meat side, the strong showing for beef continues, with the report saying they have edged up to a new historical high as global demand remained solid and exportable supplies from major producing countries remained tight.

There were also increases for sheepmeat and pigmeat prices.

Sheepmeat demand from China, the Middle East and Europe was strong while pigmeat was bolstered by strengthening overall global demand.

The price of poultry, in contrast, continued to slip with the FAO saying there are currently “abundant surplus supplies” in Brazil, a key exporter, which is adding to the downward pressure on prices.

There was less good news on the cereal side, with the sub-index dropping to the lowest level since September 2020.

Maize prices declined sharply during the month with supplies increased by ongoing harvests in Argentina and Brazil, which are ahead of 2024 production levels. Expectations of a record maize harvest in the US are adding to the drop in prices. Rapeseed oil prices were also lower ahead of improved supplies with the imminent harvest of the EU crop.