Food prices record first annual fall in six years

Food prices fell 0.7 per cent in May 2010 and by 0.5 per cent for the year to May, Statistics NZ has said. This is the first annual fall in food prices since the year to July 2004.

For the year to May 2010, lower prices were recorded for meat, poultry, and fish (down 4.5 per cent) and fruit and vegetables (down 4.5 per cent).

Meat, poultry, and fish prices have now returned to levels last seen in September 2008 and are 7.1 per cent lower than their peak in 2009.

Fruit and vegetable prices have been falling on an annual basis for nearly a year.

The 0.7 per cent fall in food prices in the May 2010 month followed a 0.5 per cent fall in April and a 0.2 per cent rise in March.

“Food prices are back down to levels last seen in 2008 and are now 3.8 per cent below their peak in July last year,” Statistics NZ’s prices manager Chris Pike said.

In May 2010, the meat, poultry, and fish subgroup decreased 2.4 per cent. The key contributors were porterhouse/sirloin beef steak (down 16.2 per cent) and fresh chicken (down 5.0 per cent), both of which were influenced by discounting.

The grocery food subgroup decreased 0.7 per cent in May 2010. This decrease was largely due to lower prices for potato crisps (down 5.8 per cent) and chocolate bars and blocks (down 4.4 per cent).

However, butter and cheddar cheese prices are on the rise, having increased 51.1 per cent and 13.6 per cent, respectively, over the past five months.

Fruit and vegetable prices decreased 2.1 per cent in May 2010, with mandarin and kiwifruit prices falling 34.7 per cent and 49.4 per cent, respectively. Kiwifruit and mandarin prices typically fall in May as supply becomes more plentiful.