Dive Brief:
- Global food prices dropped by just under 1% last month, continuing the steady tumble food prices have taken since April 2014, according to the U.N. Food and Agriculture Organization (FAO).
- The FAO food price index fell 1.5 points to 165.1 points for a basket of cereals, oilseeds, dairy, meat, and sugar. This was the lowest index reading since September 2009.
- The falling prices are attributed to "high global production, a strong U.S. dollar and cheaper crude oil," according to Reuters.
Dive Insight:
Price declines were led by the drops in prices for milk and sugar. In the U.S., milk is dealing with an enormous surplus and struggling to increase demand. Sugar is also experiencing its own surplus, and in March, prices for sugar fell to a near six-year low along with the weakening of the Brazilian real.
As for other commodities, "Cereals and oils prices firmed and meat prices remained stable," Reuters reported.
These price drops could be a boon to food and beverage producers looking for cheaper ingredients to improve their margins or even decrease their prices to consumers. This is especially true for processed foods companies, who are trying to win back the consumers they've lost to other healthier food producers.