Food prices were 10.1% higher in October 2022 compared with October 2021, Stats NZ said today.
“This was the highest annual increase since November 2008,” consumer prices senior manager Nicola Growden said.
In October the annual increase was due to rises across all the broad food categories measured. Compared with October 2021 grocery food prices increased by +9.7%, fruit and vegetable prices increased by +17%, restaurant meals and ready-to-eat food prices increased by +7.5%, non-alcoholic beverage prices increased by +8.7% while meat, poultry, and fish prices increased by +10%.
“Increasing prices for barn-raised eggs, cheddar cheese, and two-minute noodles were the largest drivers within grocery food,” Growden said.
Potatoes, bananas, and cabbages influenced fruit and vegetables prices the most.
“Previous patterns of seasonal price movement for fruit and vegetables suggest it’s more typical to see a larger fall in fruit and vegetables for the October month,” Growden said.
The monthly price rise was broad-based, with increases seen in 125 of the 162 items Stats NZ measures. In October 2021 they only saw price rises in 82 of the items measured, with the other 80 all falling.
Monthly food prices were +0.8% higher in October 2022 compared with September 2022. After adjusting for seasonal effects, they were up +1.8. Fruit and vegetable prices fell -5.2%, but after seasonal adjustment rose +1.3%.
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112 Comments
"Orr started tightening before many other central bankers did."
By tightening, do you refer to the below ?
“Those mistakes include
- over-doing the scale of money-printing,
- not lifting interest rates earlier
- and designing the Funding for Lending Programme so badly that commercial banks are still receiving ultra-cheap money when that no longer makes any economic sense.
*waits with baited breath to hear of the 'benefit of hindsight plan' that would have saved us from disaster during COVID that doesn't involve QE*
There's a glut of people on this forum that believe they could do a much better job of macroprudential policy than those employed to do it worldwide - the only thing we're missing is their alternate plan.....
*chirp chirp go the crickets*
Wow. Not sure how any Govt could spin this in a positive way. Govt actions have unleashed the wage and price spiral, and business has no choice but to start lifting it charges or be forced to the wall. Last time this cut loose interest rates got to 22% to control it. Such an outcome would be horiffic.
How do you stop it?
Thing is, wages are not 100% cost of goods. If everyone's wages tripled, you shouldn't see a tripling of the price of goods.
- Item costs $25 Labour, $50 materials, 20% GP = $93.75 sell price
- Labour triples to $75. Suddenly it's $75 Labour, $50 materials, 20% GP = $156.25 sell price.
Labour as a percentage of sell price goes from 27% to 48%. Understand materials are also subject to cost fluctuations, but this whole "wage inflation bad" argument is flawed.
Materials double. So it's $100 materials, Labour $75, 20% GP = $218.75 sell price. Labour is 34% of sell price. You know, the Labour that is also the consumer.
And many of us voted for John Key precisely because he campaigned on addressing the housing crisis and the productivity problem. It was particularly disappointing, as - as you are wont to point out here - National should've been better, but then seemed to decide just to enrich themselves and their mates and turn their backs on what they campaigned on.
Arguing which major party has been slightly better or worse at pandering to entitled property speculators over the last 20 years is like arguing which turd is the nicest colour. They in their entitlement have wreaked havoc on the economy by rewarding speculation on land instead of productive hard work.
(Though at present National is campaigning on giving property speculators tax cuts so that working Kiwis will once again be bearing even more of the load so others can freeload.)
The RBNZ made house prices go up under both parties, house prices are quite obviously tied to interest rates unless there is excess supply. But at least Labour have done what they can in terms of tax and building, National really did almost nothing, just the 2 year brightline that you can avoid simply by waiting 2 years, and now they plan to do less than nothing by reversing what Labour have done.
Yeah, fair point. As much as I've labelled Jacinda Ardern as John Key 2.0 for saying "people expect the value of their main asset to keep rising" and the Labour govt for choosing to allow the RBNZ to inflate the market over COVID, they have at least tried to redress the tax imbalance slighly, and disincentivise speculators.
I would of course like to see politicians choose to reward hard work more than speculation on land, but it's a hard road fighting voter entitlement mentality (as even John Key pointed out).
Looked true in the coverage here: https://www.interest.co.nz/property/108301/pm-jacinda-ardern-says-susta…
I think you'll find that a lot of the increase in the choice to build was on the back of many FHB's seeing the shoddy state of NZ housing and the cost for these old and cold houses, coupled with the spiraling costs of housing since 2020. Who could blame them for wanting to build when you could get a new house, warmer, drier, sure it's not the old 1/4 acre block as they used to be, but it is comfortable and has enough to be happy. I can't attribute the increases in builds to Labour but I'd love some commentary if someone can shed further light
Xmas nears. Unfortunately family pressures have always tended to spill out at this time. This year a lot of households are going to be financially stretched and embarrassed to say the least. Whether they like it or not, accept it or not, this government is now likely going to face the greatest backlash and wrath from the electorate in general that has ever been recorded. PM Ardern is shortly skipping off overseas once again. That habit may well need to increase, she is a fair weather sailor on this water. Architects of their own demise, squarely.
It’s neither an easy nor nice prospect is it. Families & their kids not getting a break, not a happy Christmas. Bit like that recent plaintive story of the little one in the USA where 27 invitees didn’t turn up to her birthday party. This year is sadly shaping up, I suggest, for too many as being courtesy of Jacinda the Grinch, she who stole Christmas.
Happened in the 80s with a wage price spiral …….. our second house in Auckland had a 22% mortgage. The house cost $130,000….. can’t remember the amount but would have been around $100,000 - we were each earning between $15,000 and $20,000, we spent so much on our mortgage that we could afford little else. It was very bad. Now will be so much worse as young people have borrowed huge amounts based on low interest rates. Cross your fingers that we get nowhere near half that.
Yeah unfortunately people were quite frivolous back then. A 22% mortgage rate would imply 15% term deposit rates? Could people not save the equivalent of 2 - 3 years salary with a 15% TD Rate tail wind and buy the house with cash? Instead they rush out and buy a house at 22 and then complain about 22% mortgage rates......
We expect kids these days to save 2 - 3 years salary just for a down payment, and they only have a 3% TD Rate tail wind.
15% term deposit rate ( minus Tax - top marginal tax rate in the early 80s was 66%) but still trying to catch up with house prices rising at 10-20% per annum. (house prices doubled every 4 years in the late 70s and early 80s), slowed down a bit from the mid80s.
https://www.interest.co.nz/property/87961/adjusting-inflation-gains-hou…
https://tradingeconomics.com/new-zealand/deposit-interest-rate (select max to see the deposit rates in the 80s.)
People should repent for not having your old boomer world view? Wow. I guess we should all follow what’s best for you?
Fact check on your assertions - what air taxes?
What oil/gas ban - it’s still being imported and used, ergo no ban, duh.
Worker shortages = COVID and a global problem, and why should our wages be undercut by 3rd world labour migration?
QE - maybe yes, but find a capitalist utopia that has not used QE since 2008 and then remind us how that’s uniquely Labour’s fault.
Meanwhile, bald Lex Luther (aka the Nats Great Saviour/ JK 2.0) has got nothing…
- I'm a Millennial
- I DO NOT own a house or land
- I rent
- Air is composed of many gases - SOME TAXED
- NZ Oil & Gas exploration has been sunsetted at best
- I did not mention immigration
- The definition of inflation is; "the increase of the money supply" [QE]
- I voted TOP the last two elections
CHECKMATE.
This is really depressing 10% extra on food! I can often look at CPI food increases and say… “well if tomatoes or courgettes - usually out of season - are $20 a kg then don’t eat them” or “yoghurt is not really a staple food”. Now food increases have really hit into the cheapest, most basic of foods that are the backstops when times are tough for young families…… bananas, cabbage and two minute noodles! I hope this can right itself sometime in the foreseeable future.
I was wondering if we might start to see this, a concentration of inflation towards basic essentials as more people are forced to adopt a frugal approach towards their weekly shop.
Fiscal intervention needed to save the working poor from a crisis caused by wealthy lenders and borrowers.
$1400 a week to service a million dollar mortgage at 2 year rate. Food is the least of many peoples problems.
House prices to rents are so out of whack at the moment, who would buy a house in Auckland when rent only costs / provides less than half the mortgage repayments?
Does it matter what the inflation percetage is, as Mr Orr under Mr Roberstson guidance will increase the OCR by 0.5% and will find data/narrative to support their action.
It is as clear as day and night that, first the action is decided and than data/narrative to support that action - Any doubts anyone, please comment
The differences between Labour and National are very small, at a time when big change is needed to correct our situation. At this stage I'm putting my hope in Orr - he's made huge mistakes in the last 3 years, but he does seem willing to change course, and unlike the two major parties he's not handcuffed to the timid instincts of self-interested middle class voters.
For Fed and Jay Powell read RBNZ and Adrian Orr.
Jay's going to come out on fire, talking (out his ass) about how the Fed's going to keep rates in the stratosphere until the 2030s. Market's already priced his rhetoric, which is why very front of curve didn't budge today while entire back end plunged. Jay doesn't matter. Link
Martin North on the DFA channel just explained that the inflation got trimmed slightly by this weird adjustment they do once a year to health insurance costs (a big component in US) whereby they take into account insurance provider profit and reserves. That weird adjustment down won't happen for another year.
So I don't think that 0.3% drop or whatever it is can be taken seriously.
I really like them but they can be hard to clean like all ovens however it's hard to impossible to get behind the fan. You can use them to reverse sear steak quite effectively and consistently. If I was buying another one I think I would get a more expensive one that looks more like a mini conventional oven for easier cleaning. That is all they are really, a small fan forced oven.
“The price of food continues to rise and as much as they try to blame overseas factors, Labour needs to accept it has cooked up this problem all by itself,”
says ACT Leader David Seymour.
and this is gold
“When a food superpower like New Zealand has record food inflation, far higher than the CPI, we can definitively say inflation is a local problem, caused by Labour’s economic mismanagement.”
Nats and Act would be even worse as they would pat our exporters on the back for making record profits.
Fact is big food business here dont have competitors close enough to compete their margins down so they charge us top dollar while shipping off huge volume at lower prices because it cost so much in supply chain costs to export.
Forestry is just the same, the chinese will take every log they can get and dont reject a single stem.
Easy for big corporates to just send it their.
At least this government is looking in to these big monopolies, Nat/Act would do absolutely nothing
The only ones impacted are the poor and middle class and i thought we had A Labour government in this country.
Question : Are labour really pro poor and middle class??
Answer : Don't seem like as the people making the decesions for the poor are getting paid more than half a million dollars per year themselves.
I wish more people understood that the price we pay for food items is almost wholly dependent on the international trading price for that food item. That's the price we pay for exporting most of what we produce. For example, the price we pay for beef lags international trade prices by 6 - 9 months (reflecting the lag from forward orders etc).
I thought this might have been a discussion of the cause rather than the right bashing the left.
My opinion is that energy costs are one of the biggest factors. Diesel is more than double plus there have been large increases in the cost of pesticides and fertilizers also transport cost have increased. Labour is probably a small factor.
The last spike in food prices was after the GFC and the increase in GST.
We have been blessed with cheap food through decades of improvement in agricultural technology. Food is and is expected to be cheap, we can build cities and enjoy luxuries without worrying about food.
There isn't much fat left in food production, land is scarce and processes are mostly optimized. Increases in regulation and inputs like machinery, labour, fuel, fertilizer, will add straight to production costs and producer risk.
Time to pay a lot more for food.
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