Food Price Index – August 2017

Food Price Index – August 2017


Food prices rose in August, up 0.6 percent for the month and 2.3 percent for the year, and as any baker out there will tell you, one of the factors driving food price rises has been butter going up. So butter prices rose 11 percent for
the month and 62 percent for the year. That brings butter to an average price of $5.39 for a cheapest available 500g block. So that’s up more than $2 per block that consumers would be paying compared with this time last year. Well butter prices have been going up globally in response to high demand, so what we’ve seen with butter prices is every three years or so – 2008, 2011, and 2014 – they’ve spiked up and then they’ve come back down into the pack of dairy products, so it remains to be seen whether that pattern will repeat. Butter has become more in vogue and it’s as people have been moving away from processed food into more “natural” products, and that seems to be driving a lot of the increase in demand globally. Fresh fruit and vegetables continue to be a factor, so we’ve seen vegetable prices a lot higher throughout the winter as just the general wet weather has continued to feed through into supermarket prices, so that’s moderated a little bit in the latest period but we’re still seeing vegetable prices that are 8.7 percent higher than this time last year, and the two main factors there are kumara prices and potatoes. Well kumara prices have been more than double what they usually are for most of the winter, but potato prices have joined them in the high ranks this time around so potato prices were up 8.9 percent, just in the month, and 29 percent for the year, and a lot of that is to do with the wet weather we’ve had – it makes it harder to grow them but also a lot harder to harvest the potatoes, it’s hard work out there for those farmers at the moment. Avocado prices are coming back down, so avocado prices have had their second consecutive monthly fall and we can expect to see that
continue over the next few months.

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