A key measure of international food commodity prices declined for the third straight month in June but remained close to the record set in March.

Despite increases in meat and dairy prices, the UN Food and Agriculture Organization’s food price index released Friday fell 3.7 points to 154.2 points last month, still 23% above June 2021. The drop last month was due to declines in prices for vegetable oils, grains and sugar.

“The factors that drove global prices high in the first place are still at play, especially a strong global demand, adverse weather in some major countries, high production and transportation costs, and supply chain disruptions due to COVID-19, compounded by the uncertainties stemming from the ongoing war in Ukraine,” said FAO Chief Economist Máximo Torero Cullen.

FAO’s gauge of grain prices fell 4.1% in June, led by a 5.7% drop in wheat prices. That softening in wheat prices "was driven by seasonal availability from new harvests in the northern hemisphere, improved crop conditions in some major producers, including Canada, higher production prospects in the Russian Federation, and slower global import demand,” FAO said.

Chicago corn futures topped $8 a bushel as recently as April but dropped to well under $7 in June. On Friday, December futures were trading at about $6.25 a bushel. 

Vegetable oil prices were down 7.6% last month, driven by some easing in palm sunflower, soybean and rapeseed (canola) markets. FAO said recently high prices for soybean and sunflower oil had dampened demand for those commodities. Sugar prices, meanwhile, declined 2.6% in June. 

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Dairy prices climbed 4.1% last month and meat prices were 1.7% higher.

While prices of all categories of dairy products increased last month, cheese prices “rose the most, underpinned by a surge in import demand for spot supplies amid market concerns over supply availabilities later in the year, as the early summer heat wave further weighed on already low milk output in Europe.”

Poultry prices reached an all-time high in June, due in part to the impact of the U.S. avian influenza outbreak. Beef prices rose as China ended import restrictions on Brazilian beef.

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