The Global Food Price Index Continues Rising in 2021

Food expenditures as a portion of disposable income have trended downwards in the U.S. for more than 50 years, but the trend could be reversing as food prices have risen sharply over the past months.

Since June 2020, the UN’s Food and Agriculture Organization’s (FAO) food price index has risen for nine consecutive months, with almost every food group setting new three-year highs in 2021. If the trend continues, food prices could begin to outpace income growth and monetary support from governments.

The one outlier in changing food prices has been meat prices, which have lagged behind with a minimal increase since mid-2020.

This graphic tracks the FAO’s food price indices along with their year-over-year (YoY) changes, showing the rapid price increases many of our staple food groups have had over the past year.

The Rising Food Prices of 2020 and 2021

Over the past five years, the FAO’s food price index has fluctuated by a few percentage points, but the arrival of the COVID-19 pandemic brought significant volatility.

Sugar and vegetable oils saw the largest changes, dropping by double-digit percentages (-19.2% and -12.4% respectively) in March of 2020, before recovering with the strongest overall price surges of the various food groups.

Food Price Indices Month-over-Month Change

The food price index increased by almost 17% YoY going into 2021, and while dairy, cereals, sugar, and vegetable oil prices all increased by double-digit percentages, meat prices rose less than 1% on average in 2021.

Surging Demand for Food at Home Drives Higher Prices

Although food prices have always fluctuated depending on weather conditions and global trade affecting food supply, this year’s increases were especially driven by a weakening U.S. dollar and increased demand due to the COVID-19 pandemic.

The pandemic resulted in severe changes to the world’s eating habits, with restaurant walk-ins and reservations down by more than 60% while demand for food at home increased as people stocked up on essentials.

To go alongside this, trade and supply chain disruptions in essential agricultural materials like fertilizer resulted in an inconsistent output from farmers and food producers, causing issues right as demand surged.

Meat and Dairy Prices Aren’t Keeping Up

As other food prices rise, the lack of significant increases in meat prices could reflect the avoidance of more expensive food products during tighter times, a lack of supply chain disruptions and constraints compared to agricultural sectors, or a larger societal trend of reduced animal product consumption.

Although dairy prices increased by 10% YoY in 2021, this increase was less than half of the price increases of cereals and sugar (21.7% and 22.3% respectively), and less than a quarter of vegetable oils prices which rose by 44%.

Plant-based alternatives are rapidly growing in popularity as nearly one in four Americans are reducing their meat consumption while veganism is rising in select European nations. Interestingly, despite these trends, 2020 also saw U.S. meat purchases rise as 43% of Americans have been buying more meat since the start of the pandemic.

Fighting the Fear of Inflating Food Prices

Whether meat prices catch up soon or not, the general trend of rising food prices poses a new inflationary pressure upon people around the world.

With in-restaurant dining taking a backseat, the increased prices are felt by everyone as they stock their cupboards, and inflation fears have been brewing as nations make their way out of the pandemic.

Rising government deficits and an increasing money supply represent efforts by governments to support citizens and national economies, but could ultimately be a key factor fueling the rising food prices.

One thing is certain, if food prices continue rising by double-digit percentages in the coming months and years, incomes and government support will struggle to keep up.

All the World’s Metals and Minerals in One Visualization

We live in a material world, in that we rely on materials to make our lives better. Without even realizing it, humans consume enormous amounts of metals and minerals with every convenient food package, impressive building, and technological innovation.

Every year, the United States Geological Service (USGS) publishes commodity summaries outlining global mining statistics for over 90 individual minerals and materials. Today’s infographic visualizes the data to reveal the dramatic scale of 2019 non-fuel mineral production.

Read all the way to the bottom; the data will surprise you.

Non-Fuel Minerals: USGS Methodology

A wide variety of minerals can be classified as “non-fuel”, including precious metals, base metals, industrial minerals, and materials used for construction.

Non-fuel minerals are those not used for fuel, such as oil, natural gas and coal. Once non-fuel minerals are used up, there is no replacing them. However, many can be recycled continuously.

The USGS tracked both refinery and mine production of these various minerals. This means that some minerals are the essential ingredients for others on the list. For example, iron ore is critical for steel production, and bauxite ore gets refined into aluminum.

Top 10 Minerals and Metals by Production

Sand and gravel are at the top of the list of non-fuel mineral production.

As these materials are the basic components for the manufacturing of concrete, roads, and buildings, it’s not surprising they take the lead.

These materials fertilize the food we eat, and they also form the structures we live in and the roads we drive on. They are the bones of the global economy.

Let’s dive into some more specific categories covered on the infographic.

Base Metals

While cement, sand, and gravel may be the bones of global infrastructure, base metals are its lifeblood. Their consumption is an important indicator of the overall health of an economy.

Base metals are non-ferrous, meaning they contain no iron. They are often more abundant in nature and sometimes easier to mine, so their prices are generally lower than precious metals.

Base metals are also the critical materials that will help to deliver a green and renewable future. The electrification of everything will require vast amounts of base metals to make everything from batteries to solar cells work.

Precious Metals

Gold and precious metals grab the headlines because of their rarity ⁠— and their production shows just how rare they are.

While metals form the structure and veins of the global economy, ultimately it is humans and animals that make the flesh of the world, driving consumption patterns.

A Material World: A Perspective on Scale

The global economy’s appetite for materials has quadrupled since 1970, faster than the population, which only doubled. On average, each human uses more than 13 metric tons of materials per year.

In 2017, it’s estimated that humans consumed 100.6B metric tons of material in total. Half of the total comprises sand, clay, gravel, and cement used for building, along with the other minerals mined to produce fertilizer. Coal, oil, and gas make up 15% of the total, while metal makes up 10%. The final quarter are plants and trees used for food and fuel.