Have Food Prices Peaked?

30 05 2008

I was forwarded an Associated Press article that says food prices have probably peaked.

PARIS (AP) — World food prices are set to fall from current peaks in the coming years but will remain “substantially above” average levels from the past decade, a report said Thursday.

……..

Despite the price hikes, general price levels have remained “remarkably stable,” suggesting that inflation in the coming decade will “remain low,” the report says.

Compared with the previous decade, the report said average prices over 2008-2017 for beef and pork should rise 20 percent; sugar around 30 percent; wheat, maize and skim milk powder 40 to 60 percent; butter and oilseeds more than 60 percent; and vegetable oils over 80 percent.

That’s not really comforting, but the report was really about world food prices, not just US food prices which have seen a spike recently.  What the story is saying is food prices should begin falling in the coming months, but we’re not going to see them fall to what they were five years ago.  Still, it’s a little bit of relief.

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