The Food and Agriculture Organisation of the United Nations (FAO) sheepmeat price index increased by 4.7 points in July to 168.9 – another record high and the biggest monthly increase this year.
The index now stands 13.4 points higher than it did in July last year.
The FAO explained the increases were due to “persistently tight exportable supplies in Oceania and sustained global import demand”.
The beef price index travelled in the opposite direction, falling by 2.9 points to 153.2, which is still 13 points higher than it was in July 2025.
The FAO attributes the decline to “weaker import demand from Asia”.
It refers to the fact that Australian prices have “softened” due to the fact that it has filled its 2026 quotas for China and Korea, while Brazil’s exports were slowing because it was close to filling its quota.
The FAO beef price index is strongly influenced by Australia and Brazil, as they – along with the US – provide the data that is used in calculating the index.
The poultry meat index fell sharply, down 7.2 points to 117, with uncertainty in the EU over imports from Brazil attributed as a cause by the FAO, while abundant supplies and weak global demand were highlighted as the reasons for the pigmeat index falling by 3 points to 98.7.
Slight fall in dairy index
The overall dairy price index was down 0.8 points in July, with lower butter and powder prices offsetting an increase in the cheese index.
The butter price index fell by 4 points to 131, which is the lowest it has been since September 2023.
The skim milk powder (SMP) index was down 4 points to 125, while the whole milk powder (WMP) index also fell by 4 points to 121, while there was a modest increase in the cheese index, up 1 point to 108.
Cereals
The cereal price index was 3.8 points higher in July than it was the previous month and 7.3 points higher than it was in July last year.
The FAO referred to the higher wheat prices, which were 5.8% higher in July and 9.9% higher than in July 2025.
It explained that this was due to “heightened concerns over continued disruptions to Black Sea export flows and damage to export infrastructure, further compounded by the impact of recent heatwaves on crop yields in several key producing countries”.
World maize prices also increased in July, up 3.6% on the previous month, which the FAO attributed to “concerns over hot and dry weather in parts of the Corn Belt in the United States of America and spillover effects from firmer energy markets amid heightened geopolitical tensions”.
Barley was down 1.9%, which the FAO says is due to favourable crop prospects in Australia and the Black Sea region offsetting expected lower yields in the EU due to heatwaves.
The overall FAO food price index was up by 0.7 points in July compared with June, but is still 1.3 points ahead of where it was in June last year.
The overall food price index hides a range of different performances among the different food categories.
Global grain prices have been depressed over a long period, yet global conflicts and particularly dry weather could affect supplies negatively over a short time.
Similarly, sheepmeat supply is limited compared with global demand, whereas the opposite is true in the case of poultry meat and pigmeat.
Globally, beef has had a prolonged run of supply and demand being aligned, but may be disrupted in the latter part of the year as Brazil and Australia have exhausted their quotas for China.
Also, if the EU suspends imports from Brazil, as is expected next month, this will disrupt poultry and beef exports in particular and could have a negative effect on prices if they don’t find alternative markets.