The Food and Agriculture Organisation (FAO) of the United Nations’ (UN) world food price index for August showed that global meat prices hit a record high in the month, while dairy prices, which dropped slightly for a second month in a row, were still 16.2% higher than a year ago.

The bad news for the tillage sector continues, however, with the sub-index for cereal prices falling to the lowest level in five years (see Figure 1).

In its commentary on the update, the FAO said that the meat index was boosted by continued high beef and sheepmeat prices globally.

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Beef was underpinned by strong demand from the United States and firm import demand from China, which kept a floor under Brazilian prices, despite that country’s significant reduction in sales to the US following President Trump’s imposition of 50% tariffs.

Sheepmeat rose for the fifth consecutive month in August, with supplies from Oceania directed towards the UK and US markets.

On the dairy side, there was some softening of prices, particularly for butter, cheese and whole milk powder. Robust production from New Zealand and steady supplies from the EU were cited for the 2.5% decline in global butter in August. Import demand, especially from Asia, remained subdued.

In contrast, demand from southeast Asia helped push skim-milk powder prices 1.8% higher.

In cereals, where the index is 40% below the peak seen in May 2022, there was a decline in wheat prices from July which the FAO said reflected ample global supplies and subdued import demand from key buyers in Asia and north Africa.

Larger harvests in the EU and Russia further weighed on prices. In somewhat better news, global maize prices rose for the third consecutive month amid fears about the damage heatwaves in the EU will cause to yields.

Comment

The improved weather, and dairy and meat prices, made 2025 a good year for farming. The tillage sector however, with low product prices and increased competition for land faced plenty of challenges.

The one thing we have learned in farming over the years is that business is cyclical, with swings in prices and growing conditions from year to year. While nothing is guaranteed about the future, the fundamental driver of demand for food – the increasing global population – means that prices will almost inevitably have to maintain a level where farming can be undertaken profitably. Without a financially sustainable system for basic food production, the risk of food shortages would quickly emerge. It’s in everyone’s interest that each sector, whether it be dairy, livestock or tillage, has that financial sustainability in the long run.