Deflation: "Food prices fall at fastest pace in 7 years amid 'timid demand'"

I know other things are declining in price but this is actually rather profound. Back in May 2008, during the row crop price spike*, we posted a snippet from Minyanville:

...Donald Coxe, chief strategist of Harris Investment Management and one of my favorite analysts, spoke at my recent Strategic Investment Conference. He shared a statistic that has given me pause for concern as I watch food prices shoot up all over the world.

North America has experienced great weather for the last 18 consecutive years, which, combined with other improvements in agriculture, has resulted in abundant crops. According to Don, you have to go back 800 years to find a period of such favorable weather for so long a time....

We have now reached 26 years of near-perfect conditions for industrial food production and may see all that change very quickly, very soon. In fact 2015 or maybe 2016 may turn out be the pinnacle of the corn, soybean (row-crop) and wheat business, at least for the next 30 years or so.

From Agrimoney:

Food prices fell in 2015 for a fourth successive year, and at the fastest pace in seven years - led by the biggest drop on record in the value of meat, the United Nations said.

Food prices dropped in December by 1.0% month on month to their lowest since April 2009, the UN food agency, the Food and Agriculture Organization, said.

The drop took the decline for 2015 to 17.1% - the second biggest fall in values for a calendar year on records going back to 1990.

"Abundant supplies in the face of a timid world demand and an appreciating dollar are the main reason for the general weakness that dominated food prices in 2015," FAO senior economist Abdolreza Abbassian said.

Meat price tumble

For meat prices, the drop of 23% last year was by a distance the biggest drop on record, after a 2014 which had lifted values to a record high.

The decline included a 2.2% month-on-month drop in December which the FAO attributed in part to "reduced import demand in the US" for beef, which "intensified competition in other markets" as export supplies backed up.

"For pigmeat, a surge in output in the European Union caused both domestic and export prices to fall," the FAO added.

Pork prices over 2015 were also undermined by the recovery of the US herd, as the threat from porcine epidemic diahorrea (PEDv) faded.

'Intensifying export competition'

Cereals were the second worst performer in the FAO index last year, falling by 17.6% to end the year at their lowest since June 2010, with Argentina's reforms to export taxes and restrictions providing an extra late depressant to values, on top of ideas of ample world supplies.

"Expectation of larger supplies entering world markets following the removal of export taxes in Argentina weighed on wheat quotations," the FAO said

Corn prices fell "amid intensifying export competition and sluggish international demand"....

...MORE

*As best as we could determine, the spike was caused by the diversion of corn to ethanol production and more importantly the dramatic rise in the cost of oil. As we've noted over the years:

...Remember, the rule of thumb is it takes around 10 crude oil calories to produce 1 row crop (mainly corn and soybeans) calorie.
Most other food prices are similarly dependent on their input costs.
One oft-cited bit of nuttines is the fact it takes 127 calories of aviation fuel to get a head of lettuce from California to London.