Commodity prices to remain high but dip in prices expected says FAO

In a report by the Food and Agriculture Organization (FAO) the price of agricultural commodities are expected to stay higher the coming 10 years, than they've been the previous 10 years. The present cost of agricultural products are expected to go down from present levels, but not far.

While beef and pork prices are expected to be around 20% higher than the last 10 years, wheat and corn are expected to be around 60% higher.

The present hikes in prices of agricultural products has led to increased prices for the average consumer prompting demonstrations and even riots. In some countries consumers have to pay about 50% of its average revenue in food and increases in these markets are heavily affecting families. The more developed countries are less vulnerable as for example the US only uses about 10% of the average revenue for food. It seems that the developed countries are less vulnerable for the increases, but they weigh more on the porer countries. The direct impact of the rise in prices on retail products are more difficult to measure, but in other countries where food is consumed more directly from its source, the price changes are more evident.

Many factors are believed to support higher prices, such as drought for example in Australia and increased demand from fast developing countries like China and India. The report specially singled out the increased demand in the US for agricultural products to produce biofuel as a source of higher prices and pointed out the need to consider alternative ways to produce energy.