The United Nations’ food agency announced global food prices rose 1 percent in March, according to Fox Business News.
The rise in prices is due to dairy costs, which have been hard hit by drought this past year, according to the organization. Cereal prices, however, remain the same.
The Food and Agriculture Organization (FAO) price index, which measures month-to-month price changes in cereals, oilseeds, dairy, meat and sugar averaged 212.4 in March. The index was 210.7 in February, the highest since October 2012.
The dairy sub-index was effected a bit more and jumped 22 points in March to 225.3, one of the largest recorded changes ever. The sub-index is based on one of the world’s largest exporters of dairy, New Zealand, where prices have climbed due to buyers bidding against one another.
“All the dynamic this month comes from the dairy,” said FAO senior economist Concepcion Calpe. “In general the situation is relatively calm.”
The market price for dairy dipped a bit towards the end of 2012, but the last few months have seen prices rise back up. One reason for the spike in food prices was due to a record setting drought in the United States this past summer. Dry weather has plagued a large majority of other dairy producing countries as well.
“Dry weather in Oceania which has hit pastures and led to milk production falling off steeply and a subsequent decrease in processing of dairy products, which include butter, cheese and milk powder,” reports Fox.
However, the FAO remains confident that the prices will begin dipping in the upcoming months.
“We are optimistic for the coming crops,” Calpe said. “The previous year was particularly bad so barring something dramatic the direction should be upwards for production. If this is what happens we could see prices trending downwards.”