Dairy giant New Zealand endures butter price shock
The dairy price shock spreads as far as cheese and milk, leading one economist to suggest locals face the grim prospect of cereal without milk if they want to save money.
Butter prices leapt 46.5 percent in the year to June to an average of NZ$8.60 (US$5.09) for a 500-gram (1.1-pound) block, according to official data from Stats New Zealand.
Milk prices surged 14.3 percent over the same period, while cheese shot up 30 percent.
High dairy prices have hit the headlines in New Zealand, with media outlet Stuff reporting that 'exorbitant' prices are unlikely to 'melt away' any time soon.
Wholesale and retail store Costco restricted butter sales to a maximum of 30 blocks per customer in June, but still sold out, according to the New Zealand Herald.
The prices are hurting consumers, said independent economist Brad Olsen, chief executive of Infometrics.
'At the moment, I'm going with any other alternative I can find,' Olsen said of butter prices.
'I'd also say, the cheap option for breakfast at the moment seems to be to try cereal without the milk.'
The phenomenon was driven by international prices and demand, Olsen said.
Butter supplies had failed to keep up with rising demand over the past two years, he said.
'New Zealand exports the vast majority of our dairy products. So if you're a company that's exporting butter, you've got to make a decision. Do you sell it at the international price overseas, or do you sell it cheaper in New Zealand?' the economist said.
'No business is going to sell it cheaper… if they can get a better price overseas.'
But while New Zealand consumers were feeling the price pinch, the overall economy was benefiting as exporters creamed off larger profits from sales overseas.
'The sort of returns that our farmers and the primary sector more broadly are getting, and the economic benefit that brings, is actually far more substantial,' Olsen said.
'It's an extra NZ$4.6 billion (US$2.7 billion) that has been flowing into the economy from the higher dairy payout. That's a significant boost.'
New Zealand butter lovers are actually faring better than some, he said, adding they still pay 46 percent less than Americans. –AFP
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
New Straits Times
18 hours ago
- New Straits Times
US migrant raids spark boom for private detention providers
DONALD Trump's promise to carry out the largest deportation operation in US history has appalled some Americans. But others are cashing in on the boom in demand for private detention centres. Migrants captured by Immigration and Customs Enforcement agents need to be temporarily housed in places like the facility being readied in California City, prior to deportation. "When you talk to the majority of residents here, they have a favourable perspective on it," said Marquette Hawkins, mayor of the hardscrabble settlement of 15,000 people, 100 miles (160 kilometres) north of Los Angeles. "They look at the economic impact, right?" California City is to be home to a sprawling detention centre that will be operated by CoreCivic, one of the largest companies in the private detention sector. The company, which declined AFP requests for an interview, says the facility would generate around 500 jobs, and funnel US$2 million in tax revenue to the city. "Many of our residents have already been hired out there to work in that facility," Hawkins told AFP. "Any revenue source that is going to assist the town in rebuilding itself, rebranding itself, is going to be seen as a plus," he said. Trump's ramped-up immigration arrests, like those that provoked protests in Los Angeles, saw a record 60,000 people in detention in June, according to ICE figures. Those same figures show the vast majority have no conviction, despite the president's election campaign promises to go after hardened criminals. More than 80 per cent of detainees are in facilities run by the private sector, according to the TRAC project at Syracuse University. And with Washington's directive to triple the number of daily arrests – and US$45 billion earmarked for new detention centers – the sector is looking at an unprecedented boom. "Never in our 42-year company history have we had so much activity and demand for our services as we are seeing right now," Damon Hininger, executive director of CoreCivic, said in a May call with investors. When Trump took office in January, some 107 centres were operating. The number now hovers around 200. For Democratic politicians, this proliferation is intentional. "Private prison companies are profiting from human suffering, and Republicans are allowing them to get away with it," Congresswoman Norma Torres told reporters outside a detention centre in the southern California city of Adelanto. At the start of the year, there were three people detained there; there are now hundreds, each one of them attracting a daily stipend of taxpayer cash for the operator. Torres was refused permission to visit the facility, run by the privately owned GEO Group, because she had not given seven days' notice, she said. "Denying members of Congress access to private detention facilities like Adelanto isn't just disrespectful, it is dangerous, it is illegal, and it is a desperate attempt to hide the abuse happening behind these walls," she said. "We've heard the horrifying stories of detainees being violently arrested, denied basic medical care, isolated for days, and left injured without treatment," she added. Kristen Hunsberger, a staff attorney at the Law Center for Immigrant Advocates, said one client complained of having to wait "six or seven hours to get clean water." It is "not sanitary and certainly not... in compliance with just basic human rights." Hunsberger, who spends hours on the road going from one centre to another to locate her clients, says many have been denied access to legal counsel, a constitutional right in the United States. Both GEO and ICE have denied allegations of mistreatment at the detention centers. "Claims there is overcrowding or subprime conditions in ICE facilities are categorically FALSE," said Tricia McLaughlin, the assistant secretary at the Department of Homeland Security. "All detainees are provided with proper meals, medical treatment and have opportunities to communicate with their family members and lawyers." But some relatives of detainees tell a different story. Alejandra Morales, an American citizen, said her undocumented husband was detained incommunicado for five days in Los Angeles before being transferred to Adelanto. In the Los Angeles facility, "they don't even let them brush their teeth, they don't let them bathe, nothing. They have them all sleeping on the floor, in a cell, all together," she said. Hunsberger said that for detainees and their relatives, the treatment appears to be deliberate. "They're starting to feel that this is a strategy to wear people down, to have them in these inhumane conditions, and then pressure them to sign something where they could then agree to being deported," she said.
New Straits Times
2 days ago
- New Straits Times
Gold falls on firmer US dollar and rising trade optimism
LONDON: Gold prices fell on Friday, pressured by a recovery in the US dollar and optimism over progress in trade talks between the United States and the European Union. Spot gold was down 0.6 per cent at US$3,347.28 per ounce by 0949 GMT. US gold futures fell 0.7 per cent to US$3,349.80. The US dollar index rebounded from more than a two-week low, making bullion more expensive for overseas buyers, while benchmark 10-year US Treasury yields rose. A resurgence in risk appetite driven by optimism over potential tariff negotiations, and lower-than-expected US jobless claims reinforcing the view that the Federal Reserve is unlikely to cut rates, is pressuring gold, said Ricardo Evangelista, senior analyst at brokerage firm ActivTrades. "There is an element of uncertainty that still lingers... with a strong support around US$3,300, I see the potential for gold prices to rise should new episodes of volatility be triggered," he said. The European Commission said on Thursday that a negotiated trade solution with the United States is within reach - while EU members voted to approve counter-tariffs on 93 billion euros (US$109 billion) of US goods in case the talks collapse. Data showed the number of Americans filing new applications for jobless benefits fell to a three-month low last week, pointing to stable labour market conditions. President Donald Trump pressed Fed Chair Jerome Powell to lower interest rates in a tense visit to the US central bank on Thursday, less than a week before the next rate-setting meeting where policymakers are expected to hold interest rates steady. Markets are pricing in a potential rate cut in September. Gold typically performs well during periods of uncertainty and in low-interest-rate environments. Spot silver fell 0.6 per cent to US$38.85 per ounce, but was still on track for a weekly gain of about 1.6 per cent. Platinum was 1.2 per cent lower at US$1,391.25, with palladium also down 1.2 per cent at US$1,213.76.
Malay Mail
3 days ago
- Malay Mail
Trump: Australia will get ‘so much' of our ‘magnificent beef', others that refuse are ‘on notice'
WASHINGTON, July 25 — The United States will sell 'so much' beef to Australia, US President Donald Trump said on Thursday after Canberra relaxed import restrictions, adding that other countries that refused US beef products were on notice. Australia on Thursday said it would loosen biosecurity rules for US beef, something analysts predicted would not significantly increase US shipments because Australia is a major beef producer and exporter whose prices are much lower. 'We are going to sell so much to Australia because this is undeniable and irrefutable Proof that US Beef is the Safest and Best in the entire World,' Trump said in a post on Truth Social. 'The other Countries that refuse our magnificent Beef are ON NOTICE,' the post continued. Trump has attempted to renegotiate trade deals with numerous countries he says have taken advantage of the United States — a characterisation many economists dispute. 'For decades, Australia imposed unjustified barriers on US beef,' US Trade Representative Jamieson Greer said in a statement, calling Australia's decision a 'major milestone in lowering trade barriers and securing market access for US farmers and ranchers.' Australia is not a significant importer of beef but the United States is and a production slump is forcing it to step up purchases. Last year, Australia shipped almost 400,000 metric tonnes of beef worth US$2.9 billion (RM12.2 billion) to the United States, with just 269 tonnes of US product moving the other way. Australian officials say the relaxation of restrictions was not part of any trade negotiations but the result of a years-long assessment of US biosecurity practices. Canberra has restricted US beef imports since 2003 due to concerns about bovine spongiform encephalopathy (BSE), or mad cow disease. Since 2019, it has allowed in meat from animals born, raised and slaughtered in the US but few suppliers were able to prove that their cattle had not been in Canada and Mexico. On Wednesday, Australia's agriculture ministry said US cattle traceability and control systems had improved enough that Australia could accept beef from cattle born in Canada or Mexico and slaughtered in the United States. The decision has caused some concern in Australia, where biosecurity is seen as essential to prevent diseases and pests from ravaging the farm sector. 'We need to know if (the government) is sacrificing our high biosecurity standards just so Prime Minister Anthony Albanese can obtain a meeting with US President Donald Trump,' shadow agriculture minister David Littleproud said in a statement. Australia, which imports more from the US than it exports, faces a 10 per cent across-the-board US tariff, as well 50 per cent tariffs on steel and aluminium. Trump has also threatened to impose a 200 per cent tariff on pharmaceuticals. Asked whether the change would help achieve a trade deal, Australian Trade Minister Don Farrell said: 'I'm not too sure.' 'We haven't done this in order to entice the Americans into a trade agreement,' he said. 'We think that they should do that anyway.' — Reuters
