Food prices down in December, and 1% over year

15 January 2013

Food prices fell 0.2 percent in the December month, and were down 1.0 percent on a year earlier, according to latest figures from Statistics NZ. Lower prices in the December month for non-alcoholic beverages (down 2.8 percent) offset a rise in meat, poultry, and fish prices (up 0.9 percent).

Statistics NZ says:

“Food prices fell in December, reflecting cheaper prices for non-alcoholic drinks that were partly countered by higher prices for chicken and seasonal price rises for fruit,” prices manager Chris Pike said.

This fall for non-alcoholic beverages was led by soft drinks (down 2.6 percent), coffee (down 5.6 percent), and fruit juice (down 6.1 percent), which were all lower due to discounting.

The rise in meat, poultry, and fish prices was mainly influenced by higher prices for chicken pieces (up 10 percent), due to less discounting. However, this rise was balanced by the falling price of lamb (down 14 percent). This is the lowest lamb has been since February 2009.

In the December month, fruit and vegetables rose 0.7 percent. Seasonal rises in apple (up 14 percent), potato (up 13 percent), and kiwifruit prices (up 28 percent) provided the main upward contributions. The main downward contributions came from seasonal falls in tomato (down 30 percent) and broccoli prices (down 31 percent). Tomato prices often fall in the spring and early summer months. They have fallen 30 percent or more in each of the past three months and are now 75 percent lower than their off-season peak in August 2012.

 Annual movements

Shifting the focus to annual from monthly price changes, the food price index (FPI) decreased 1.0 percent in the year to December 2012. Grocery food (down 3.6 percent) made the main downward contribution. Significant individual contributions came from fresh milk (down 9.4 percent), cheese (down 8.2 percent), and bread (down 4.2 percent).

The price of lamb decreased 24 percent, which is the largest annual fall since the series began in January 1989. Takeaway pizza prices also decreased (down 12 percent).

For the year to December 2012, fruit and vegetables (up 6.0 percent) made the main upward contribution. Kumara (up 109 percent), avocado (up 107 percent), apple (up 20 percent), and pumpkin (up 32 percent) prices all increased. High kumara prices were influenced by poor weather conditions in both the planting and harvesting seasons, which affected the crop in 2012. Avocados enjoyed a bumper season in 2011, with a large quantity available on the market. Avocado harvests follow a two-year pattern, with a smaller crop every other year.

The FPI measures the rate of price change of food and food services purchased by households. Statistics NZ visits shops across New Zealand to collect prices for the FPI and check package sizes.