United Nations report on food prices

A new report from the United Nations agency responsible for food and agriculture is predicting that food prices will drop a bit but remain above average for the next decade:

The expected causes of higher-than-average prices during the next decade include a doubling of biofuel production, higher fuel costs that increase the cost of producing crops and transporting food, and greater demand for food and animal feed in richer developing countries where incomes are rising, the report says.

Prices for vegetable oils are expected to remain the highest, 80 percent above the average from 1998 to 2007; wheat, corn and skim milk powder are anticipated to be 40 to 60 percent higher; sugar, 30 percent; and beef and pork, about 20 percent. Biofuel production should account for about a third of the expected increases in prices for vegetable oils and grains. [emphasis added]

The Bush administration has argued that using corn to make ethanol is only responsible for 2 to 3% of the rise in global food prices.