NEW YORK — Rising agricultural commodity prices are causing the world to re-enter a period of “agflation,” according to Rabobank. The firm forecast food prices will reach record highs in 2013 and continue to rise well into the third quarter of 2013. But unlike the grain shortage of 2008, the scarcity will affect feed intensive crops with “serious repercussions for the animal protein and dairy industries.”

“The impact on the poorest consumers should be reduced this time around, as purchasers are able to switch consumption from animal protein back towards staple grains like rice and wheat,” said Luke Chandler, global head of agricultural commodity markets research at Rabobank. “These commodities are currently 30% cheaper than their 2008 peaks. Nonetheless, price rises are likely to stall the long-term trend towards higher protein diets in Asia, the Middle East and North Africa. In developed economies — especially the U.S. and Europe — where meat and corn price elasticity is low, the knock-on effect of high grain prices will be felt for some time to come.”

Rabobank estimates that the Food and Agricultural Organization Food Price Index will rise by 15% by the end of June 2013. In order for demand rationing to take place, in turn encouraging a supply response, prices will need to stay high. As such Rabobank expects prices — particularly for grains and oilseeds — to remain at elevated levels for at least the next 12 months.