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
|Date||Food Price Index MoM Change||Meat Price Index MoM Change||Dairy Price Index MoM Change||Cereals Price Index MoM Change||Vegetable Oils Price Index MoM Change||Sugar Price Index MoM 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.
The Biggest Mining Companies in the World in 2021
The graphic takes a look at the world’s largest mining companies by market capitalization and the metals they produce.
Ranked: The Top 20 Mining Companies
Mining companies have emerged from the COVID-19 pandemic in excellent financial and operational shape and the forecast is even brighter as the economy recovers.
The market is expected to reach a value of nearly $1.86 trillion by 2022, with the increasing demand for minerals for power generation and renewables technology.
In the graphic above, we show the world’s top companies by market capitalization as of June 22, 2021, and the metals they mine.
The Bottom Line: From Smartphones to Food
From roads, hospitals, automobiles, houses, computers, satellites, and even fertilizer for crops, mining provides many of the materials we interact with every day. Copper, iron, rare earth metals, aluminum, and phosphate are just a handful of the mined materials that make modern life and feed the bottom line for mining companies.
The two biggest by market capitalization, BHP ($179B) and Rio Tinto ($132B), both produce a range of commodities, mainly iron ore and copper. The next on the list is also the biggest company in Brazil, Vale ($112B). The miner is the world’s largest producer of iron ore and pellets (small balls of iron ore) used to manufacture steel.
|Company||Market Cap (USD)||Country||Main Mining Activity|
|BHP||$179B||🇦🇺 Australia||iron ore, copper, coal|
|Rio Tinto||$132B||🇦🇺 Australia||iron ore, aluminum, copper|
|Vale||$112B||🇧🇷 Brazil||iron ore, nickel|
|Glencore||$55B||🇨🇭 Switzerland||copper, cobalt, zinc, nickel|
|Norilsk Nickel||$54B||🇷🇺 Russia||palladium, nickel|
|Freeport-McMoRan||$52B||🇺🇸 United States||copper|
|Anglo American||$52B||🇬🇧 United Kingdom||diamonds, copper, platinum, iron ore, coal|
|Fortescue Metals||$51B||🇦🇺 Australia||iron ore|
|Newmont Goldcorp||$50B||🇺🇸 United States||gold|
|Southern Copper||$47B||🇺🇸 United States||copper|
|Zijin Mining Group||$38B||🇨🇳 China||gold, copper|
|Barrick Gold||$37B||🇨🇦 Canada||gold|
|Anglo American Platinum||$28B||🇿🇦 South Africa||platinum, palladium, rhodium|
|Ganfeng Lithium||$24B||🇨🇳 China||lithium|
|Wheaton Precious Metals||$20B||🇨🇦 Canada||gold, silver, palladium, cobalt|
|Antofagasta||$19B||🇬🇧 United Kingdom||copper|
|Ma’aden||$18B||🇸🇦 Saudi Arabia||gold|
A $57 billion gap separates the top 3 from the rest of the group. In fourth place comes Glencore ($55B) with its mixed operations of trading and mining metals, agricultural products, and oil and gas.
The automotive industry is a big consumer of metals, which explains Norilsk Nickel’s ($54B) fifth place. The company, owned by the wealthiest man in Russia, is the world’s biggest producer of palladium, used in vehicles’ catalytic converters.
Miners also serve the luxury market, with precious metals like gold, silver, and gemstones. Number six on the list, Anglo American ($52B) is one of the world’s leading diamond companies.
In terms of countries, Canada leads the ranking with 4 miners on the list. The United States and Australia come next with 3 companies each.
Charging and Changing the Future of Mining Companies
The United States, Europe, and Asia are making big investments in electrification and power generation. By 2024, almost 33% of the world’s electricity is forecast to come from renewables.
This shift from fossil fuels will require a lot of copper, cobalt, and lithium for batteries. Mining companies are in a position to capitalize as the market expands.
For example, no. 17 in the list, China’s Ganfeng Lithium, the world’s third-largest producer of lithium chemicals for batteries, saw its market capitalization grow more than 25% in 2021.
The energy transition is just beginning, and the materials used in building a more sustainable future will also build up the largest mining companies of tomorrow.
Sand, Steel, and Cement: The Annual Production of the World’s Building Blocks
Humanity produces a staggering amount of sand, steel, and cement every year to build the cities and spaces we live in.
Essential Materials for City Construction
From the buildings around us to the sidewalks we walk on, sand, steel, and cement are an important foundation for all urbanization. Every year, the world produces an immense amount of all three materials in order to supply the continuous construction of human-built environments around the world.
Using data from the U.S. Geological Survey, this visualization shows the steel, sand, and cement produced in 2020, to help put in perspective the amount of raw materials we produce and ultimately consume every year.
The Concrete Facts of Cement
Cement is the indispensable glue that binds together the materials that make up concrete highways, sidewalks, and buildings.
With concrete being the world’s most consumed material (beaten only by water), it’s no wonder that the world produced 4.1 billion tonnes of cement in 2020.
2020 Cement Production by Country
|Rank||Country||Cement Production (in million tonnes)|
|#4||🇺🇸 United States||90|
|#12||🇰🇷 South Korea||50|
While cement-based concrete has a variety of benefits like being fire-proof, hydrographic, and frost-resistant, the IEA estimates that in 2019 the cement sector emitted 2.4 GtCO2, which accounted for 7% of global CO2 emissions. The production of concrete also requires high amounts of water, with calculations from 2012 finding that the concrete industry’s water withdrawals made up 9% of all industry water withdrawals (1.7% of total global water withdrawal).
To combat high carbon emissions and water consumption in concrete production, Swedish power company Vattenfall has developed a concrete mix which reduces the amount of cement needed, and as a result cuts down CO2 emissions by around 25%. Shifting the world’s concrete production to this new method could be the first step in greatly reducing cement and concrete’s impact on the environment.
Steel Recyclability Steals the Show
While cement is the most commonly used material in the world, steel is the most commonly used metal. With 1.8 billion tonnes produced last year, steel fulfills a variety of structural and construction needs, along with being an essential material for the production of vehicles, mechanical equipment, and domestic appliances.
One of steel’s greatest strengths is its ability to be infinitely recycled, making it the most recycled material in the world with new steel products containing an average of 30% recycled steel. While the world produced 1.8 billion tonnes of steel in 2020, since 1900 the steel industry has recycled over 25 billion tonnes of steel scrap, reducing iron ore and coal consumption by 35 billion and 18 billion tonnes respectively.
Global Steel Recovery Rates by Sector
|Sector||Steel Recovery Rate|
|Electrical and domestic appliances||50%|
Source: World Steel Association
The steel industry is also highly aware of reducing its environmental impact, with steel plants reusing the heat and electricity from process gases to provide between 60-100% of the plant’s electricity requirements. Along with this, ~90% of water used by the steel industry is returned to the source after being cleaned and cooled.
Yet steel production still emits around two tonnes of CO2 for every tonne of steel produced, largely due to the majority of the world’s steel production taking place in China’s coal-reliant plants. However, fossil-free steel is on the horizon, with carmaker Volvo partnering with the Swedish steelmakers SSAB to explore the development of fossil-free steel for the automotive industry.
More than Beaches
Completing the trio of essential city-building materials is industrial sand and gravel, with 265 million tonnes of the material produced in 2020. Primarily composed of quartz, feldspar, and other minerals and rock fragments, industrial sand and gravel is also called silica sand or quartz sand.
“It’s actually the most important solid substance in the world because without sand, we have no modern civilization.”
– Vince Beiser
While steel and cement are opaquely visible in their end products in our cities, industrial sand and gravel primarily makes up the transparent glass walls and windows of our world. It also serves essential functions as foundry sand, forming molds and patterns for various metal castings.
Just like steel and cement, industrial sand and gravel is an essential building block of the cities we live in. As the world continues its shift towards reducing carbon emissions, it is clear that these essential materials cannot be replaced, and rather must be improved upon.
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