Source:  MEATINGPLACE.COM, 3/3/11

Global food prices climbed for the eighth straight month in February to a new record level, with meat prices alone up 2 percent from last month, the United Nations Food and Agriculture Organization said Thursday.
"Unexpected oil price spikes could further exacerbate an already precarious situation in food markets," said David Hallam, director of FAO's Trade and Market Division. "This adds even more uncertainty concerning the price outlook just as plantings for crops in some of the major growing regions are about to start," he said.

Overall, FAO’s food price index climbed 2.2 percent in February from January to its highest record since the agency started monitoring prices in 1990.

FAO expects global cereal stocks to fall sharply this year due to a decline in inventories of wheat and coarse grains.

The forecast for world cereal utilization in 2010-11 was revised up by 18 million metric tons since December, reflecting greater use of corn for ethanol production in the United States and statistical adjustments to China's historical supply and demand balance for corn.

International cereal prices have increased sharply, with export prices of major grains up at least 70 percent from February last year due to growing demand and reduced world cereal production last year.

The cereal price index, which includes wheat, rice, maize and other staples, jumped 3.7 percent in February to its highest level since July 2008. The meat price index rose 2 percent from the prior month.

FAO said the latest estimate for world cereal production in 2010 is 8 million metric tons more than was anticipated in December but still slightly below 2009.  The upward revision reflects higher estimates for production in Argentina, China and Ethiopia.

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