logo
Supermarkets aren't moving fast enough to lower dairy prices, says Federated Farmers dairy chair

Supermarkets aren't moving fast enough to lower dairy prices, says Federated Farmers dairy chair

RNZ News17-07-2025
File photo.
Photo:
123rf.com
Supermarkets aren't moving fast enough to lower the price on dairy products for consumers when there is a drop in cost, says the Federated Farms dairy chair.
Latest figures out
on Thursday had food prices shooting up
4.6 percent from last year.
The price of a block of butter is now 120 percent higher than it was 10 years ago, and increases in dairy prices in general helped pull up food prices in June, Stats NZ said.
Milk was up 14.3 percent for the year, to $4.57 for two litres, butter was up 46.5 percent to $8.60 for a 500g block, and cheese was up 30 percent to $13.04 for a 1kg block.
Federated Farmers dairy chair Karl Dean said while the market always fluctuated, supermarkets could move quicker to lower their prices when costs do go down.
"Most farms have to buy butter themselves, they can't make it on the farm, we feel the pain as well," he told
Morning Report.
"The big thing is prices do fluctuate all the time but when the prices drop back down, how quickly are those passed on to consumers?
"We've all seen it before ... it seems to take a very long time for dairy products in the supermarket to drop in price, where it should, in my view, be a little bit faster, if those companies can wrangle some deals with suppliers."
Dean said export prices continue to drive the cost of dairy, as well as the wholefoods trend, which was a direct correlation.
"The one that consumers aren't going to want to hear is because they've heard it so much already is the global exporting prices is at an all-time high," he said.
"It does seem to be that the global demand for butter at the moment just seems to be a new trend and global production hasn't ramped up as a result yet."
The commodity price for butter is double what it was 10 years ago, he said.
He said as a result, farmers are at a record-farm gate milk price this year, which has largely been led by the likes of butter and cheese.
But the main export of New Zealand, whole milk powders and skim milk powders, were not at a record-high level, he said.
"We actually have a very different pricing mix to what we've seen a decade ago," he said.
Finance Minister Nicola Willis recently asked for a please explain from Fonterra - which pinned the pricing on global prices.
But Dean said there is not much Fonterra could do.
"There is probably very little Fonterra can do, they are obviously looking at selling their consumer brand business of Australasia and that'll mean there is no longer any form of control in that local market," he said.
"To put in it in perspective, there hasn't been any new players onto the domestic market in the last 10 years in terms of butter, other than the likes of Westgold - Westland have got their very premium product.
"But there are another one or two manufacturers of butter in New Zealand and they don't supply to the domestic market at all, so that doesn't help competition."
Many
Morning Report
listeners have expressed their thoughts on the topic; here's just a few messages sent in.
"Butter price: anyone still wasting money buying food and beverages from cafés is, by definition, not suffering from dairy prices. Plenty of disposable income around apparently." - David, Dunedin
"Why is petrol so cheap in oil producing countries? Would the same logic not apply to butter in NZ?" - Owen
"When butter was at $6 a block in the supermarket, the supermarkets were earning approx. $3 per block. At $11 per block, the supermarkets are taking $5.50! The supermarkets applying a straight % mark-up is part of the problem and the lack of supermarket competition is a large part of the issue." - Name withheld
"The cost to get butter to market on the other side of the world must be significantly higher than getting it to stores in NZ. Why is that not reflected in the NZ price?" - Name withheld
"Went dairy-free over five years ago so don't know what the cost issue is all about. However, the biggest issue with dairy prices increasing is less dairy eaten in NZ and more pollution from the dairy industry in NZ." - Name withheld
"I've definitely cut back on butter and cheese use. I also take home any remaining butter from café scones. Perfect for my toast."- Sandra, Porirua
"Why is it that NZ butter and cheese is so much cheaper in Australia?" - Jacqui
"Contrary to popular belief it's possible to eat well without dairy." - Name withheld
Sign up for Ngā Pitopito Kōrero
,
a daily newsletter curated by our editors and delivered straight to your inbox every weekday.
Orange background

Try Our AI Features

Explore what Daily8 AI can do for you:

Comments

No comments yet...

Related Articles

New World Pt Chevalier to open next to derelict building and abandoned tyre site
New World Pt Chevalier to open next to derelict building and abandoned tyre site

NZ Herald

time8 hours ago

  • NZ Herald

New World Pt Chevalier to open next to derelict building and abandoned tyre site

Next door is a third of a hectare ex-Magnum Motors corner site, also fronting 8 Parr Rd North but looking in very poor shape. New World Pt Chevalier, Auckland nearing completion. 22 July 2025 New Zealand Herald photograph by Jason Dorday The contrast between the two sites could hardly be greater. How did such a situation arise and what do council and local board people say about it? The state-of-the-art supermarket is aiming to draw tens of thousands of shoppers weekly in the suburb, which currently only has a small Woolworths. The unsightly empty site next door is owned by New Zealand-registered company Hobson One. Its director is Zhengzheng Guo of Remuera. Derelict buildings in front of and around the New World Pt Chevalier which is planned to open in August. Photo / Jason Dorday He has applied for resource consent for apartments to be built in blocks beside the New World. But he is yet to succeed. 'An application was lodged in December 2024 for a three-storey mixed-use building - retail and residential,' a council spokesman said. The application was now on hold, awaiting further information, the spokesman said. Advertising showed he did try to sell the site two years ago, before downscaling plans. In June 2023, he advertised it with Bayleys. 1150-1160 Great North Rd, Pt Chevalier, Auckland, outlined in red. This was in 2023 when Bayleys' agents were marketing the property for sale. Since then, the New World Pt Chevalier has been built on the ex-RSA site next door (above the red line). Photo / Bayleys The big lot was marketed as a development site, with a 177-unit resource consent. Bayleys agents Gerald Rundle and Marty van Barneveld marketed it but were unsuccessful in selling it. Derelict buildings in front of and around the New World Pt Chevalier which is planned to open in August. Photo / Jason Dorday 'The development potential of the site under the zoning has been greatly enhanced by an approved Resource Consent for an eight-level [including basement] development of 177 apartments and three ground-level commercial units over approximately 18,000sq m according to the consented plans,' Bayleys said. Construction progresses at the site of the new New World Pt Chevalier on Great North Rd, Auckland. The store, developed by Foodstuffs North Island and designed by Wingate Architects, is due to open later this year. Photo / Jason Dorday The new supermarket has been set back from the street, with a partly covered walkway now being finished beside the Kumho Tyres building, short-stay parking out the front and a big underground basement for parking. Auckland Council documents describe buildings on the Hobson One site: '1150 and 1158 Great North Rd are occupied by a vehicle workshop, tyre shop and paint and panel beaters. Plans for apartments on Great North Rd beside the new $73 million New World Pt Chevalier. Photo / Auckland Council consent documents 'Built development within these lots comprises two-level industrial style buildings located centrally with a canopy extending over the forecourt in front, a double garage and electrical transformer at the rear of number 1150, and concrete/asphalt driveway and parking areas across the remainder of the land,' the council document says. A larger scheme was once planned. Consent was granted non-notified on February 20, 2023, for an eight-storey apartment block, with basement parking, three commercial units and 177 dwellings, the council noted. Derelict buildings in front of and around the New World Pt Chevalier which is planned to open in August. 22 July 2025 New Zealand Herald photograph by Jason Dorday But the market changed and now only about 50 units are planned. 'Given the changing demands of the market, the applicant wishes to achieve a similar development in terms of land use, albeit on a much smaller scale in terms of the height of the built form, but also notably the depth and volume of earthworks required will be significantly less,' the council document said. Kendyl Smith, chair of the Albert-Eden Local Board, said the site was private property which the council had boarded off. Smith was aware of safety and crime concerns. New World Pt Chevalier, Auckland nearing completion. Photo / Jason Dorday 'The council is actively working to maintain safety in and around this site, which involves working with the property owner to determine the next steps,' Smith said. The board had completed a review of crime prevention through environmental design in the wider area, Smith said. That identified safety-related improvements for Pt Chevalier. New World Pt Chevalier, Auckland nearing completion. Photo / Jason Dorday 'There are also ongoing patrols of the area from the council's community safety wardens, working with NZ Police,' Smith said. 'We're also looking forward to the new modular library, with full library services, joining the town square this October.' The New World opening would provide a welcome addition for locals and for the wider village, Smith said. Kāinga Ora has also developed new social housing in the town centre. This shows work on the block, long since finished. These are the new state homes in Pt Chevalier. Photo / Michael Craig On the corner of Great North Rd and Pt Chevalier Rd, a block of apartments was imported fully built from China. That is for people aged 55-plus moving into or from existing state housing. Kāinga Ora contracted Tawera Group and Teak Construction on this job. They assembled the 61-unit block of single-bedroom new units. Kāinga Ora said the modular homes were all one-bedroom apartments to cater for high demand for those types of places. They are single, factory-built modules. Last year, when New World Pt Chevalier was being built, and the home next door. Photo / Jason Dorday A man in his 90s is yet to find a buyer for his home next to the new supermarket. The Herald reported last year on 12 Parr Rd North. That has been in Albert John Andrews' family for 70 years. Foodstuffs said last year it had been working closely with the family, other neighbours and the community throughout the build process. Anne Gibson has been the Herald's property editor for 25 years, written books and covered property extensively here and overseas.

NZ 'lucky' to have 'premium' butter as only option — Fed Farmers
NZ 'lucky' to have 'premium' butter as only option — Fed Farmers

1News

time8 hours ago

  • 1News

NZ 'lucky' to have 'premium' butter as only option — Fed Farmers

Federated Farmers' dairy group chair says New Zealanders are lucky to have premium butter, but he hopes prices drop at the checkout as soon as the cost of milk solids do. The price of butter rose nearly 50% to the year ended May, Stats NZ data showed. Dairy giant Fonterra's boss Miles Hurrell sympathised with households feeling the pinch but said price increases were a reflection of supply not being able to keep up with demand. Fonterra could not offer cheaper prices to local customers, he said. Federated Farmers Dairy Industry Group chairperson Karl Dean said New Zealanders had to pay the market rate. ADVERTISEMENT "We are lucky we get a premium product as our only option... the rest of the world would love to have grass-fed butter all the time," he said. "So it is good that we have that option, but all that we ask is that when the prices come down - which they will, they always do - that flows on through the supply chain." The morning's headlines in 90 seconds, including Hulk Hogan dies, sentencing for a New Zealander who assaulted two airline stewards, and a big accolade for Te Papa. (Source: 1News) Dean believed Fonterra, wholesalers and supermarkets were doing their best to keep prices down. But they needed to react quickly when contract milk prices changed, he said.

Air NZ sees AI use as 'force for good'
Air NZ sees AI use as 'force for good'

Otago Daily Times

time9 hours ago

  • Otago Daily Times

Air NZ sees AI use as 'force for good'

Air New Zealand is working with the organisation behind ChatGPT to expand the use of artificial intelligence to help the airline avoid flight delays. The national carrier was part of a select group around the world given the opportunity to partner with OpenAI, in a first of its kind collaboration in New Zealand. Air New Zealand chief digital officer Nikhil Ravishankar told RNZ's Morning Report programme today the partnership enabled Air New Zealand to roll companion AI out to its corporate workers at pace. It also allowed the airline to "co-create" solutions, Ravishankar said. "So we already have about 1500, what we call, custom GPTs in the organisation. Think of them as sort of rudimentary agents and what Open AI partnership allows us to do is work with their engineering teams and product teams to develop these solutions to solve airline problems, not just for Air New Zealand. "We're hoping that the solutions are also applicable around the world." It also allowed Air New Zealand to become a "test bed" for some of Open AI's more cutting-edge solutions, he said. "So we get first access, early access to some of these tools as they emerge and some of these tools are turning up on almost a weekly basis." The aim was to make Air New Zealand a better airline. Ravishankar said the airline expected to see improvements in on-time performance, integrated planning and how the airline scheduled the network it flies, and service experience for customers including product design in-flight and on the ground. "So almost every aspect of the customer's experience with the airline will be impacted by AI and this partnership going forward." Asked about pricing, Ravishankar said Air New Zealand was already using AI to deal with the cost of flying, which he said was complex. "The hope really is we want it to be a force for good so we are looking at utilising AI to drive more, fairer value-centric outcomes as much as anything else." Asked what this meant, Ravishankar said AI allowed the airline to take into account "a lot more things as we think about how we price an airline seat". "For our regional network for example where we are a lifeline service, we could think of pricing approaches that fulfil that role that we play, versus what we might be doing in say the US market where we're trying to attract premium leisure tourists into the country."

DOWNLOAD THE APP

Get Started Now: Download the App

Ready to dive into a world of global content with local flavor? Download Daily8 app today from your preferred app store and start exploring.
app-storeplay-store