Food inflation now at -0.1%

August 27th, 2014 at 12:00 pm by David Farrar

foodinflation

Stats NZ has released their monthly food price index and it shows annual food inflation for the last 12 months was -0.1%, or basically are stable.

The graph below shows food inflation since 2000. Note that the spike in 2011 was partly caused by the GST increase which saw income tax rates drop to compensate.

Food is one of the basic necessities, and the cost of food is a major factor for families. Food prices are mainly impacted by global and domestic markets, but government policies that impact the economy also have an effect.

Over the five years 8 months since November 2011, food prices have increased 10.3% and fruit and vegetable prices have increased 12.5%. On a per annum basis this is 1.8% and 2.2% food inflation respectively.

During the nine previous years, annual food inflation averaged 4.1% and fruit & vegetable prices increased 5.8% per year on average. Fruit and veges costs 52% more in November 2008 than November 1999.

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7 Responses to “Food inflation now at -0.1%”

  1. Grizz (613 comments) says:

    In the last few years I have seen the fightback of the greengrocer. In my town they are as common as birdshit. Some in fact are very good and the quality of their produce and the price is far better than the local supermarkets. For someone who prefers to eat fresh and avoid processed food as much as possible, I find these stores great. I have also found that I can save a considerable amount of money by buying off the greengrocer than buying my fruit and vege at a supermarket. Sometimes the Greengrocer produce might require a little extra work such as a bit more washing and having to peel the onions, but this is not a big deal for me. The other thing I notice is that the cost of a weeks worth of Vege for the family is only a small fraction of what people spend on their food shop. I have to conclude that removing GST from fruit and vege will not alter what is in people’s wallets by much. Also for people in large towns and cities, Icannot buy into the argument that poor people cannot access cheap healty food.

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  2. mjw (401 comments) says:

    Deflation, anybody? Probably the only things saving us from deflation are the housing bubble and power price increases.

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  3. insider (845 comments) says:

    Grizz you do know that those greengrocers are usually buying from the same market and the same suppliers but the produce rejected by the supermarkets. It’s often not fresher (that’s why it might have been rejected) nor more local nor more ‘natural’ (rejection can be because of too many sprays or unacceptable sprays)

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  4. Grizz (613 comments) says:

    “It’s often not fresher (that’s why it might have been rejected) nor more local nor more ‘natural’ (rejection can be because of too many sprays or unacceptable sprays)”

    I think the consumer can make the judgement about freshness. I have to disagree that supermarket produce is better. Supermarkets like to sell produce that has visual appeal. Often produce with a few blemishes are rejected, even though they are perfectly edible, fresh and taste great. Case in point are red onions selling for 6 dollars a kilo in the supermarket. Nicely round and peeled so ready to eat. I can buy a kilo of red onions for under 2 dollars. They need to be peeled and often are not always round and perfect looking. But there is nothing wrong with them. If we reject these, then we waste a lot of food and resources in producing them. You also will end up paying a lot more for them. We have to get over ourselves. Fresh garden produce is not always perfect looking and devoid of blemishes.

    As for how local the food is, I never mentioned anything about those mythical food miles.

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  5. burt (7,425 comments) says:

    These facts will not stop Labour saying National have created the highest food inflation in the history of NZ.

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  6. Left Right and Centre (3,007 comments) says:

    I’d like to know, by % of spend, how much of an average shopping trolley’s contents truly qualifies as ‘basic necessity’ ?

    Along with ‘who ate all the pies’ ?

    Is tomato sauce a basic ? Just add this bollocks to pasta or chicken tins etc – are those a basic ? Think of everything that people spend most of their cash on that wouldn’t make the food aid list for some third world war torn hellhole. Exactly.

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  7. Left Right and Centre (3,007 comments) says:

    Yeah – my greengrocers rock. I scored a one day special onions and carrots 38c / kg. Carted home bags totaling 17kg on the old pushbike. The exertion probably costs me 10c / kg on the top.

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