Annual food prices rose 8.9% in August with food and grocery prices rising 10.6%, Statistics NZ says.
The Food Price Index for August saw grocery food prices again leading the increase, with Stats NZ highlighting rising prices for eggs.
Annual food prices rose 9.6% in July, with grocery food prices increasing 11.9% and meat, poultry and fish prices rising 9.3% annually.
In August, restaurant meals and ready-to-eat food prices increased 8.9%, meat, poultry, and fish prices increased 8.0% while non-alcoholic beverage prices increased 9.1%.
Fruit and vegetables prices increased 5.4% annually, Stats NZ said.
Restaurant meals and ready-to-eat food was the second-largest contributor to the annual movement, Stats NZ said.
“The increase in this group was driven by the same contributors as last month – dine-in lunch/brunch, takeaway meals, and dine-in evening meals.”
Monthly food prices rose 0.5% in August when compared with July 2023. After adjusting for seasonal effects, they were up 0.4%.
Fruit and vegetable prices ticked up in August when compared to July, rising 3.3%, or 2.8% after seasonal adjustment.
In July, monthly food prices fell 0.5%.
After seasonal adjustment, they fell 1.1% in July when compared to June, driven by fruit and vegetables prices which dropped 4.1%, or 7.8% after seasonal adjustment.
International food prices
Globally food prices declined in August, the United Nations’ (UN) Food Price Index showed.
Overall, the Food and Agriculture Organisation's Food Price Index, which tracks monthly changes in the international prices of globally-traded food commodities, averaged 121.4 points for the month, a fall of 2.1% from July.
Of particular interest to New Zealand, the Dairy Price Index fell 4% from July.
"In August, international prices across all dairy products declined, with whole milk powder prices falling the most, influenced by abundant supplies especially from Oceania amid seasonally rising production, together with a slowdown in the pace of imports by China, although import volumes remained relatively high," the FAO said.
It said international butter and cheese prices dropped, in part because of “lacklustre market activities associated with summer holidays in Europe”.
"Skim milk powder prices fell to their lowest level since mid-2020 due to subdued import demand and the lacklustre market activities associated with the summer holidays in Europe. Moreover, international butter and cheese prices dropped, reflecting similar factors coupled with steady production schedules in Oceania."
The Meat Price Index dropped by 3%. Demand from China was weaker alongside a jump in exports from Australia.
Cereal prices declined by 0.7% from July while vegetable oil prices decreased by 3.1%, the FAO said.
But there were some rising food prices. The FAO Sugar Price Index rose by 1.3% in August when compared to July, and the FAO All Rice Price Index rose by 9.8% from July to reach a 15-year nominal high.
The FAO said this increased reflected trade disruptions in the aftermath of a ban on Indica white rice exports by India, the world’s largest rice exporter.
“Uncertainty about the ban’s duration and concerns over export restrictions caused supply-chain actors to hold-on to stocks, re-negotiate contracts or stop making price offers, thereby limiting most trade to small volumes and previously concluded sales.
102 Comments
How do you arrive to that conclusion at 10.5%pa for August? I'll presume you were having a SARC attack?
Ever increasing food prices is just part of the inflation problem and interest rates will remain elevated or go even higher until there is less money chasing what is being produced.
But you already knew that - right?
Food prices are dropping in absolute lockstep with global food price changes 6 - 12 months ago. The level of demand for food makes bugger all difference - if New World see less demand, they just stand down some staff. Price over volume is the dominant strategy in a low competition environment like NZ.
You're right. Both Luxon and Seymour are dead silent on the entire ongoing supermarket and banking rows. In fact, Luxon gets really uncomfortable every time he is asked to comment on these issues, giving his usual response on putting more money back into the pockets of Kiwis through tax cuts (to pay straight into the bottom line of duopolies I suppose).
To think Luxon who was CEO of a virtual monopoly in NZ will decrease inflation by encouraging more competition in the NZ market is just delusional.
I'm sure as heck not voting for the greens or labour either, not a fan of Marxists.
And because I don't want to waste my vote I'm left with choosing between Act or NZ First. Oh decisions.
Which response will Hipkins use?
a) The war in Ukraine is impacting grocery prices globally it’s not just NZ.
b) We’re helping everyday Kiwis through our policy of removing GST off fresh fruit and vegetables.
c) Ive asked for an enquiry.
d) National/Act don’t have any answers in fact the average Kiwi will be worse off if they get elected.
Expect food prices to rise again once el niño really kicks in...
https://www.frontiersin.org/articles/10.3389/fenvs.2022.893879/full
You mean like the conservative government in the UK:
The price of food and non-alcoholic beverages rose by 14.9% in the year to July 2023, according to the latest Consumer Prices Index including owner occupiers’ housing costs (CPIH).
It was down from 17.4% in the year to June 2023, and a peak of 19.2% in March, which was the highest annual food inflation rate for over 45 years.
Yep at some stage you become so socialist that all your professionals (doctors, engineers, etc) leave for better conditions elsewhere. Then you have to close the borders like Cuba and North Korea. I do agree that NZ is starting to head that way, when people say they want to "fix inequality" it makes me wonder if they understand the end outcome. Wage inequality is a very important aspect of a capitalist country, asset inequality is a different kettle of fish.
There are many people shouting about inequality in this country, not just traditional lefties, and I can't remember any of them complaining that doctors or engineers are overpaid. Most of the complaints are about asset inequality. Where income is the target of their ire, it's that of executives, landlords, ticket clippers, bureaucrats and other beneficiaries of cronyism and rent seeking. Not skilled professionals.
Of course it's very convenient for the leeches to use doctors and engineers as a human shield. It's also bullshit, most of the measures that would hurt the leeches wouldn't impact skilled professionals, and for those that would (higher top tax rates) it should be possible to counter the effects using government's power to influence the industry wage.
Tax brackets in NZ have not been adjusted for 15 years, so due to inflation the upper and middle classes are paying a much higher marginal tax rate. That extra money is being used to fight inequality in the form of winter energy payments, super gold card, free prescriptions, free public transport, free dentist, GST off fruit and vegetables, etc. The middle and higher income earners are paying to fight inequality, not the asset holders. Meanwhile the Australians have been adjusting their brackets, which makes moving there even more fruitful. If this strategy was continued for say 20 more years, what would be the end result?
This was the time Labour should have said enough is enough and adjusted the brackets, and that is why they will not be elected.
"Socialism" is weird in NZ. The older generations seem to love it for themselves but screech if the younger generations want a similar deal at all.
When the young ask for things the oldies got, the oldies start ranting about communism...then take billions of the youngs' wages for their universal handouts.
Gosh there seems to have been a significant influx of Facebook-like comments all of a sudden. The comment section used to have its odd characters but everyone was largely rational. I guess it was only a matter of time before these people found the site. A real shame.
Central Banks (including the RBNZ) are arguably inherently communistic. Also, regarding banking, have you not heard of CBDCs?
Is there any sector not controlled by the government/ideologues.. health?, education?, housing?.. all (largely) government controlled. There is certainly a push to control everything from agriculture to your personal motorcar too!
Our city councils literally operate under "central planning" models. These people have never seen a person they didn't want to control or a cow they didn't want to murder.
GIVE ME A BREAK!
..let's call it Winston.
Labour brought in the MDRS, reducing the 'central planning' required or permitted by Councils. National played ball at the time, but now want to move back to a system where the Councils explicitly plan new housing areas for the next 30 years of expected demands.
But no, it's those damn Reds trying to control everything...
Thought it might be worth pointing out one of your few semi-solid points is actually contradicted by reality. And no, I'm not a Labour voter or supporter - I seem to be accused of this frequently when really I am just a fan of logic.
As for NZF, their main contribution to the last government they took part in was a slush fund placed under their central control. No action on immigration, they were bought off with a few billion to splash around the provinces.
Hilarious, this must be satire.
There's plenty of industries not controlled by government, I would say most of them. They are regulated by government though, which you seem to think is the same thing.
That's governments job, to regulate things to ensure they are fit for the people. You know, the plebs who vote in the government?
Sounds like you want libertarianism (tiny or no government) cos maybe you think the free market will fix everything? Maybe check out where libertarianism has been applied and see how well it worked for them.
Our supermarkets are operating fairly freely and they are doing the opposite of working for the good of the people, so have to be better regulated. The free market tends towards oligopoly/monopoly structures which then maximise profit and actively work against new entrants into the market by building huge barriers to entry. If that's a free market dream, I want no part of it.
Just because they are doing a bad job of it, doesn't make it not there job. Caretaker governments do nothing but support the status quo. Why? Because change is hard and takes some time, 3 years isn't long enough to make real change and they keep getting re-elected by doing nothing anyway in a red/blue revolving door. So why would they do anything but a bad job?
I don't think Marx implied that the "state" must own the means of production. Didn't he mean for the people to own ie be shareholders in the enterprise they work for? The intent is to also expand democracy into the workplace as well.
There's some wealthy folk out there really angry that the government and taxes and central banks are all communist in which case the western world has been communist for hundreds of years. The old reds under the bed is getting stirred up again. It looks like it's just really the age old power struggle between authoritarian and totalitarian rule. The people are just pawns.
Creative accounting ensures that any potential audit shows minimal margin between the invoice from the supplier and the sale/shelf ticket price.
It's the backdoor rebates where the supermarket owners make their money. There's no law that states a rebate must be paid to the supermarket trading account.
Who do you think pays for all the retail theft going on? Us of course. "Shrinkage" and security costs are simply added back to the prices we pay.
"Retail crime has continued to escalate in Foodstuffs North Island’s 300-plus grocery stores, with 3,900 separate incidents recorded from May to July this year, a 59% increase year-on-year, and up almost 19% on the last quarter.
Serious incidents reported by Foodstuffs stores such as assault, robbery and burglary have more than doubled year on year, and are already up 13% on the last quarter of this year. Repeat offenders were involved in over a third of all incidents, and the number of incidents they committed grew by 44% to 1,862 across the North Island’s New World, PAK’nSAVE and Four Square stores.
Of particular concern is the increasing number of assaults in store, with 54 separate attacks, mostly on frontline staff, in the last three months alone – up from 39 in the previous quarter, and 16 in the same period in 2022. Shoplifting accounted for three-quarters of all offences, and was up 78% year-on-year.
“We know many offenders are targeting premium cuts of meat, health and beauty products and alcohol and we know the biggest problem is repeat offending. So, it’s the same people turning up at our stores time and time again – a trespass notice doesn’t stop them – and when confronted they can get aggressive.”
We can’t keep hoping the epidemic of retail crime will cure itself.”
https://www.foodstuffs.co.nz/news-room/2023/GROCERS-REPORT-59-PER-ANNUM…
I think it is just us ripping each other off. Mint is practically a kind of weed and is priced at $250/kg (3.75 for a 15g pack at Countdown). Same goes for other herbs and mushrooms - super easy to grow and not hard to pluck, box and dispatch.
This shows a trend on how even basic food items are being elevated to luxury items on our supermarket shelves.
That's what inflation does ikim. It costs to produce food, and when those costs rise (inflation), selling prices go up. Wage increases in NZ have been greater than inflation for starters, so it is no surprise that food prices keep going up. Perhaps if Labour hadn't printed so much money, we'd be in a better place. But of course, the University Student politicians knew best.
What is absolutely laughable, is that we have the media in NZ STILL debating whether it was the war in Ukraine, supply chain issues and the like that is the cause of inflation. The stupid is real.
Expect nothing to change in the near future with a potentially dry summer, combined with the lasting damage from the horrid weather already this year. At least if Labour gets back in we'll be able to boost the poor struggling duopolies profit on produce by an extra 15% as the GST savings mysteriously disappear due to "inflation"!
Guess it's dog roll for dinner - only $3/kg at my local PnS AND fortified with B vitamins and minerals! Look for solutions not problems people!
Why look at the annual number? We all know food has gone up a lot over the last year, that is hardly news.
"Monthly food prices rose 0.5% in August when compared with July 2023. After adjusting for seasonal effects, they were up 0.4 percent." 0.4% over 12 months is ~5% per year, a big improvement. Pity there don't seem to be any quarterly figures.
According to Truflation, food and beverage price growth in the U.S. is starting to show near-term deflationary characteristics. Price inflation growth has slowed dramatically over past 12 months.
This potentially shows fundamental, underlying issues and problems with food price inflation in NZ. I think that is understandable given some of the following:
- No competitive market structure (particularly retail)
- Expensive cost structures across the supply chain (partly due to high land prices)
- Small addressable market making profit margins sticky
- No national strategy on price controls (unlike Japan)
- Credit creation allocated to the bubble as opposed to business thereby contributing to lack of business competitiveness
Agree with this assessment and great stuff including a reference to Truflation/the power of Chainlink.
I find it concerning that the US is already near 2% while we seem to be struggling. It feels less like a clean connection to global events and more indicative of reaping what we've sown.
ALDI Australia. 1k tasty cheese NZD 10.85 (1.09 per 100gm) equivalent. Best price Pack and Save 800gm Pams Tasty NZD 9.99 (1.25 per 100gm) or $12.50 if it was a kilo.
Best price Countdown. 500gm home brand tasty cheese $8.90 (1.78 per 100gm) or $17.80 if it was a kg.
Major NZ food suppliers in cahoots with the supermarkets are ripping us sideways. Small to medium suppliers are getting screwed. We need real competition in the supermarket business in New Zealand.
Does anyone remember paying 1.30 per minute for a cell phone call on peak when Telecom and Vodafone were the duopoly? What happened when 2 Degrees started?
I think cheese is GST free in Aus: https://www.ato.gov.au/business/gst/in-detail/your-industry/food/gst-an…
Take the GST off the Pams Tasty and it is $10.86/kg.
If you were able to really bulk buy, and avoid customs (unrealistic I know), it would be cheaper to fly to Sydney for the day, do a food shop and fly back that evening. You could subsidise it by taking over Vapes and alcohol to sell over there as they are cheaper here.
It's kind of laughable, what a bunch of clowns we are.
Our own Commerce Commission who is meant to police competition are a cause of some of the problems too.
Perfect example is this:
I am a big yoghurt eater for my breakfast and buy 1kg tubs. I noticed that in a matter of months the price went up from $3.99 to around $5.69 today. I also noticed that Meadow Fresh were no longer doing 1kg tubs anymore, just Yoplait and Fresh n Fruity so I starting researching.
Turns out are own Commerce Commission in the very recent past allowed Goodman Fielder (who does Meadow fresh) by them to purchase Yoplait creating another duopoly in the country. The Commerce Commission actually said that it saw no risk of the lack of competition creating upward pressure on prices as the other duopoly they created, Foodstuffs and Progressives will constraint the prices because they control 90% of the market.
“Fonterra is the largest supplier of mainstream yoghurt products in New Zealand and would continue to hold the largest market share when the merger proceeds. We consider it is unlikely that Goodman Fielder would be able to raise its prices as a result of the merger given Fonterra competes strongly on price and would continue to do so.
“Further, nearly 90 percent of mainstream yoghurt is sold through supermarkets with the majority of products sold when on promotion. This means Foodstuffs and Woolworths hold significant buyer power and are able to take action to constrain or prevent price increases.”
Well it didn't take long for that to be prove completely wrong.
There are words I would like to use to describe the people running the commerce commission, but I can't as it would likely lead to a ban.
Stop gst on all food and petrol we all need to eat and drive we have already paid tax. Gst is just another tax on already taxed money. If you run a business you can claim it back how is that not just giving to the rich and taking from the people who haven’t got a business.
Our relatively high minimum wage and comparatively high fuel prices (reflected in transport costs) will see this trend continue on at rates much higher than other nations. Our continued Supermarket 'duopoly', and what I presume will turn out to be a rather toothless Grocery Commission wont help.
I suspect our next inflation read in October for the Sept-23 Quarter will still be dire (both tradeable and non-tradeable)...it will continue to have a 5 in front of it (particularly with the impact of the fuel tax being reimplemented, combined and the deteriorating NZD position in the last 3 months against the US$).
Things are looking grim overall.
My sister in Arizona pays $2.89 USD for a dozen free range eggs. $4.89 NZD currency. Thats .41 cents NZD per egg. The cheapest I see per egg at my local stores is .92 cents. Interesting to see in comments below that the UK does not have VAT on food. But in the next few weeks I would expect Labour to come out with "no tax on food " YEA! Free groceries on the last Friday of the month. Free eye glasses for everyone. Anything to remain in POWER. Because thats what it's all about POWER.
Food prices increase at these rates when measuring say "tomatoes" and other foods out of season.
It is only the modern, 'entilted' shopper and fixed surveys who expect out of season foods to remain the same.
Shop for food on a seasonal basis, as has been done in previous 1000s of generations and your food bill becomes very different.
We welcome your comments below. If you are not already registered, please register to comment.
Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.