Food & Climate
The World Food Price Index rose slightly in June, driven by increases in two commodities that pushed them to new record highs.
The FAO Food Price Index (FFPI) averaged 128.0 points in June 2025, up 0.7 points (0.5%) from May, according to the statement that “Food & climate” platform received today.
While the price indices for cereals and sugar decreased, they were outweighed by increases in the indices for dairy products, meat and vegetable oils. Overall, the FFPI was 7.0 points (5.8%) higher than its level in June 2024 but remained 32.2 points (20.1%) below its peak reached in March 2022.
The FAO Cereal Price Index averaged 107.4 points in June, down 1.6 points (1.5%) from May and 7.8 points (6.8%) below its value a year ago, the FAO Vegetable Oil Price Index averaged 155.7 points in June, up 3.5 points (2.3%) from the previous month and 18.2% above its June 2024 level.
Meat pushed World Food price Index
The FAO Meat Price Index averaged 126.0 points in June, up 2.1% month-on-month and 6.7% year-on-year, marking a new record high. This was driven by rising prices for all meat categories except poultry.
Global bovine meat prices reached a new peak, reflecting reduced export supplies from Brazil and strong demand from the United States, which put upward pressure on Australian export prices. Pork prices rose due to strong global import demand amid stable supplies, while sheep meat prices rose sharply for the third consecutive month, supported by steady international demand and reduced export availabilities from Oceania.
Conversely, poultry meat prices continued to decline, influenced by ample domestic supplies in Brazil following the imposition of export restrictions following the detection of a case of highly pathogenic avian influenza in mid-May. However, Brazil regained HPAI-free status after 28 days without any new cases on commercial farms, prompting some trading partners to ease restrictions and spurring a gradual recovery in import demand.
The FAO Dairy Price Index averaged 154.4 points in June, up 0.8 points (0.5%) from May and 26.5 points (20.7%) from its value a year ago.
The butter price index recorded the largest monthly increase, rising by 2.8% to a new record of 225 points.
The continued upward trend was mainly driven by persistent supply tightness in Oceania and the European Union, coupled with strong import demand from Asia, including the Near East.
New Zealand entered its seasonal production slowdown, while in the European Union, herd contractions triggered by environmental regulations curbed milk production expansion, with some western regions further impacted by lingering impacts of the bluetongue virus outbreaks in late 2024.
In the United States of America, lower monthly butter production and stocks falling below last year’s levels added further pressure on prices. Cheese prices also rose for the third consecutive month, on continued solid retail and foodservice demand in East Asia. By contrast, skim milk powder prices edged down by 0.6%, while whole milk powder fell (2.3%) amid subdued demand and ample global supplies.
Cheese industry prioritizes
In recent years, there has been a marked increase in the global demand for milk fat and butter.
This trend is fueled by a combination of changing dietary preferences, economic factors, and shifting trade dynamics.
Over the last decade, there has been a major shift towards natural and whole-food ingredients, leading consumers to favor dairy fats over processed alternatives. Butter, in particular, has enjoyed a resurgence as more people opt for “clean-label” foods without artificial ingredients. Health trends also play a role, as dietary perspectives have evolved to embrace natural fats, including butter, as beneficial in moderation.
The bakery, pastry, and food service industries are significant consumers of butter and milk fat. As these sectors expand globally, especially in developing markets, they increase the demand for these dairy fats. In regions like Asia and the Middle East, where dairy consumption is rising, butter and milk fat are key ingredients in a growing array of foods.
In the EU, a major producer of butter and milk fat, cheese production is prioritizing milk use. Cheese production has higher profitability than butter, leading dairy producers to allocate more milk towards cheese rather than butter. This limits the available milk fat for butter production, thereby pushing butter prices up. Cheese demand, particularly for exports, has increased significantly in recent years, contributing to the strain on milk fat supplies.
Increased feed and energy costs have raised overall dairy production expenses, impacting milk fat prices. Additionally, adverse weather conditions and supply chain disruptions, exacerbated by high costs of transporting and storing perishables, have reduced milk output in key regions like Europe and the U.S. This limits butter and cream availability, driving prices higher, according to “The Cattle Site“.