The June update of the Food and Agriculture Organisation (FAO) of the United Nations (UN) predicts that volumes of cereals, dairy, sheep meat and poultry meat will increase this year while beef and pig meat production will drop slightly.

For international trade, only beef is predicted to show a small decrease.

Dairy

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FAO predicts that the volume of global milk production will increase this year by just under 1% to 944m tonnes, a second year in a row of slow growth.

It forecasts a reduction in Europe, south America, south Africa and Oceania, offsetting increases in Asia, North America and Central America and the Caribbean.

The report identifies increasing milk yields in India and Pakistan. High-output large-scale dairy farms are the basis for increased Asian milk output.

Global trade in dairy products is expected to marginally higher than 2022 at 85m tonnes milk equivalent.

Cereals

FAO predicts a 1% increase in global cereal production to 2,813m tonnes in 2023 with the bulk of the increase expected in maize production. It also forecasts an increase in global cereal stocks of 1.7% to a record 873m tonnes. Trade is predicted to remain similar to 2022 levels at 471.6 million tonnes.

After the price surge following the Russian invasion of Ukraine in February 2022, price levels have dropped back and the FAO cereals price index for May was 43.9 points or 25% lower than last years record values. However, despite this sharp drop, the index is still 7% above its five-year average.

Meat

Global beef production is forecast by FAO to drop marginally in 2023 to 76.1m tonnes compared with 76.3m tonnes in 2023 though the volume traded is predicted to show a marginal increase to 12.8m tonnes compared with 12.6m tonnes in 2022.

Sheep meat production on the other hand is expected to increase marginally to 16.8m tonnes in 2023 compared with 16.7m tonnes in 2022 with 1.1m tonnes traded internationally.

As with beef, pigmeat production is forecast to decline marginally in 2023, down from 122.3m tonnes in 2022 to 121.7m tonnes this year.

Trade is also forecast to decline slightly to 11.4m.

Poultry is the largest meat in global production in trade and its growth is forecast to continue growing. Volume is expected to increase by 1.3% to 142.7m tonnes compared with 2022 while the volume traded is predicted to grow to 16.4m tonnes, up from 16.3m tonnes in 2022.

As with other commodities, prices surged to a record high in June 2022 before falling back though since February this year there has been a recovery.

The FAO Food Outlook – Biannual report on global food markets is produced in June and November each year and as with all forecasts is a reasonable indicator of the expected direction of travel for markets but circumstances can change, making the forecasts obsolete.