The UN Food and Agriculture Organisation has warned that weather conditions in various countries and political tensions in the Black Sea region have made food markets more volatile

In its new Food Outlook, the first major forecast of 2014, FAO estimated cereal production this year at 2,458 million tonnes (including milled rice), down some 2.4 percent from the 2013 record production, though still on track to be the second largest ever.

The decline is likely to be more pronounced for coarse grains. Still, inventory levels remain fairly good. Analysts have said there is no cause for concern at this early stage before the main 2014/2015 seasons get underway – assuming trade flows are not negatively affected by tensions in the Black Sea region, which they have not been up to now.

Meat and milk production are both expected to grow in 2014. World meat production is expected to grow modestly to 311.8 million tonnes, an increase of 1.1 percent over 2013 levels, with growth concentrated in developing countries. Pig and sheep production is set to fall, though cattle and poultry will expand.

While international prices for meats have remained at historically high levels since the beginning of 2011, with no sign of an overall decrease, international dairy prices declined in March and April, registering levels close to those seen a year ago.

Overall, the FAO Food Price Index, which measures the price of a number of staple food items around the world and was also published this week, showed that prices eased in April.

The FPI was down 1.6 percent in April, compared to March, and 3.5 percent below April 2013 levels. A drop in dairy prices led the decline, though sugar and vegetable oil prices also fell. Cereals and meat prices, however, firmed slightly.

Cereal prices rose by 0.5 percent, but remained 10.3 percent below April 2013 values.

Meat prices, which are close to historic highs for a number of animal species, rose by an even smaller amount than cereals. Here, rises were driven by increased pigmeat prices, due mainly to concerns over the effect of Porcine Epidemic Diarrhea virus (PEDv), which is set to impact on export supplies in the United States, and has also been discovered in Canada, Mexico and now Japan.