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High Food Prices Tied to Crop Prices says FAO

The high crop prices are seen as having a ripple affect on food prices.

The U.N. Food and Agriculture Organization released a special report Wednesday saying that the high global prices of crops are spilling into the food value chain and raising retail food prices.

According to the report, dairy prices have seen the biggest increase, rising more than 200% in some cases. High feed costs, tight dairy supplies and strong import demand are some of the issues that have caused those higher prices. Livestock prices have also been affected by the high cost of animal feed.

While highs and lows in prices are common, FAO says it's rare to see so many commodities at such high levels all at the same time. The report says what is especially troubling is the high volatility in the markets; coupled with the low inventory, prices are sensitive to sudden and unexpected changes in the market.

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