Melting point: Butter, cheese and milk push 5% food price increase
Friday, 15 August 2025
Food prices increased 5% in the 12 months to July 2025, with dairy food leading the rise, according to Stats NZ.
The rise in prices was up from a 4.6% increase in the year to June, the department said.
All five food groups recorded higher prices compared with a year earlier, prices and deflators spokesperson Nicola Growden said.
Grocery food led the annual increase, up 5.1%, driven by higher prices for milk, butter, and cheese.
The average price for milk was $4.70 per 2 litres (up 16%), butter was $8.59 per 500g (up 42.2%), and cheese was $13.01 per 1kg block (up 29.5%). These figures reflect the cheapest available options, Stats NZ said.
Milk prices have increased 33.9% since July 2020, and in the past year contributed more to the rise in overall food prices than any other item.
Meat, poultry, and fish prices rose 7.9%, the next biggest contributor to the annual increase, with beef steak and beef mince up 24.6 and 19.3% respectively. The average price for 1kg of beef mince in July was $21.97, about $3.50 more than a year ago, Growden said.
Other annual price increases were fruit and vegetables (up 7.3%), restaurant meals and ready-to-eat food (up 2.2%), and non-alcoholic beverages (up 4.4%).
Westpac Chief Economist Kelly Eckhold told Stuff there has been a supply shortage of things like meat and dairy products, which has been felt globally and increased demand.
As a result, he said, oil prices have gone up, which has been filtering through to New Zealand’s consumer price index, whether at the grocery store or the cafe.
Inflation also continues to linger in the background as a factor, with Cotality Chief Property Economist Kelvin Davidson telling Stuff a cut to the OCR next week was likely.
“We know the economy is still really weak, the unemployment rate has gone up again, so it is fairly likely they will deliver that cut, the two-three percent,” he said.
The next OCR announcement from the Reserve Bank is on August 20.