Dairy prices continued their upward trend in June with the FAO food price index reporting an increase of 5.9 points or 4.1% on May figures. This brings the dairy index to 149.8 points which is 29.9 points or just under 25% higher than it was for the same month last year.

FAO suggests that “persistent global supply tightness” combined with continued strong demand is keeping dairy markets moving on.

The meat price index was also higher in June, up 2.1 points or just under 2% in May to 124.7 points. This is 14 points or 12.7% higher than the same month last year.

Rising global beef prices were presented as an explanation along with recovery in pig prices and less New Zealand lamb sustaining sheepmeat prices.

Overall, June recorded a third monthly fall in a row from the record high set in March for the FAO price index which includes vegetable oils, cereals, sugar, meat and dairy.

It dropped by 3.7 points to 154.2 points, a 2.3% decline on May but despite the fall, the index is still 29 points or 23.1% ahead of this time last year.

The fall is very much due to the drop in cereals values, which at 166.1 points in June is a drop of 7.2 point on the near record level of the previous month.

The explanation offered by FAO is seasonal availability of new harvests in the northern hemisphere, along with maize harvests progressing quickly in Argentina and Brazil.