FAO said as part of its Food Outlook that cereal prices are drifting lower on the backs of the expected hefty supply. Wheat and maize futures on the Chicago Board of Trade have both dropped more than 16 per cent since the start of the year.
Soybeans and other oilcrops could reach an all-time production high this year, thanks to record US yields, although demand is expected to grow even faster.
Global food markets are expected to remain "generally well balanced" in the year ahead, FAO said. Dairy markets are also expected to return to general balance in 2016 after a long period of excess supply.
Stagnant world meat output in 2016, twinned with rising international demand for pigmeat and poultry, especially from East Asian markets, continues to lend support to meat prices, the organisation said.
Global fish production, meanwhile, is forecast to expand by a below-trend 1.8 per cent this year to 174 million tonnes, as aquaculture output is expected to expand by 5 per cent and wild-caught fish output to decline by 0.9 per cent, due in part to El Nino's impact on Pacific sardines, anchovetas and squid.