For the year just gone by the 2013 the World food Price Index averaged 209.9 points, the third highest annual value on record. The bullish performance was driven mainly by high dairy and meat prices, according to latest statistics from the Food and Agriculture Organisation (FAO).

The FAO Index, which measures changes in price in five key commodity groups namely cereals, dairy, meat, vegetable oils and sugar averaged 206.7 points in December 2013, more or less unchanged from November.

According to the FAO, the relatively unchanged result was due to a sharp increase in dairy prices and firming meat values largely balanced out a steep decline in sugar quotations and lower cereal and oil prices.

It also says while large supplies pushed down international prices of cereals (with the exception of rice), oils and sugar. The main drivers pushing the food index to record highs are dairy and beef prices. Dairy values peaked in 2013, while meat also hit a record.

Key for Ireland amid constant talk of expansion was the performance of the dairy price index. In 2013 the index for dairy prices hit a record high averaging 243 points, smashing the previous high of 230 points in 2011. The FAO says factors influencing the record highs include demand for milk powder, especially from China, which remains strong and processors in the southern-hemisphere are focusing on this product rather than on butter and cheese.

It says as a result, in context of light trading and most supplies being already committed, prices of the latter products (butter and cheese) have risen more than those for milk powder. Good news for Irish dairy farmers was that the high prices have continued into December. The dairy price index averaged 264.6 points in December, a rise of 13.2 points, or 5.2 percent, over November.

Also important in an Irish context is the performance of the meat price index. The FAO says in 2013, the Index remained at historically high levels, averaging 184 points, compared to 182 points in 2012 and 183 points in 2011. It says this is on the back of prices for bovine and pig meat moving higher.

According to its analysis, demand from China and Japan have resulted in beef prices showing consistent growth since the middle of the year. In other areas prices for poultry were stable, while those for sheep meat moved lower, which coincided with the seasonal slaughter peak in the southern-hemisphere.

In terms of cereals, which are a key global commodity, prices fell significantly in 2012 down 7.2 per cent from 2012 figures. According to the FAO this is due to large global supplies, following record harvests in 2013, which exerted downward pressure on international prices of wheat and maize in particular. Prices were not down across the board in 2013, rice values a key crop in many countries were up.