The Food and Agriculture Organization (FAO) of the United Nations says global food prices dropped sharply in May due to generally adequate supplies, growing global economic uncertainties and a stronger U.S. dollar. The FAO Food Price Index fell 4% in in May to 204 points -- the lowest level since September 2011 and about 14% below its peak in February 2011.
FAO raised its forecast for world cereal production by 48.5 million metric tons (MMT) to a record 2.419 billion metric tons (BMT) -- largely due to expectations for a record corn crop in the United States. FAO's global coarse grain production is forecast at 1.248 BMT, up 85 MMT from the previous year.
For wheat, FAO says the latest indications point to a contraction of about 3% in production in 2012, to 680.4 MMT.