Latest news with #dairyprices
RNZ News
4 days ago
- Business
- RNZ News
Dairy price dip won't last long
Dairy prices fell for the fourth consecutive auction overnight. Photo: 123rf An analyst says the new season dip in global dairy prices is likely to be temporary. Dairy prices fell for the fourth consecutive auction overnight, with the average price down more than 4 percent to US$4274. The price of wholemilk powder, which strongly influences the payouts for local farmers, fell more than 5 percent, while butter fell 4.3 percent. Dairy prices have fallen more than 7 percent over the past couple of months. NZX head of dairy insights Cristina Alvarado said the dip in prices was not surprising as global supply was outpacing demand, but the conditions were not expected to persist for long. "This is the moment of the year where the US still has a lot of products," Alvarado said. "Europe - even though they were struggling a bit at the start of the year - they have actually come up to increase their milk production. You can see that flowing through, but Europe goes to the lower side of their season, and we keep heading towards the peak of ours, that should level up." Alvarado expected the new season's payouts to be close to $10 per kilogram of milk solids - near the midpoint forecast by Fonterra . However, she said ongoing US tariff negotiations should be closely watched as new developments may affect demand patterns for dairy products. The overnight auction showed generally weaker prices across the board, including a 2.8 percent fall for cheddar, 1.7 percent dip in skim milk power, while mozzarella prices were mostly steady. Sign up for Ngā Pitopito Kōrero, a daily newsletter curated by our editors and delivered straight to your inbox every weekday.
The Guardian
05-06-2025
- Business
- The Guardian
Butter madness: New Zealanders turn to churning as price of dairy staple soars
New Zealanders are driving cross-country for hours in pursuit of cheap butter while some are ordering it from Australia or even churning their own cream, as the country battles sky-high dairy prices. Despite dairy being the country's largest export industry, recent figures from Stats NZ show domestic butter prices surged 65% in the year to March, pushing the average price for 500g to $7.42 (£3.30) – that's up about $3 from this time last year. People have been queiung at Costco in Auckland to bulk buy its cheaper blocks, prompting the wholesaler to cap shoppers' purchases to 30 blocks per shopper. Kaleb Halverson – who has earned the nicknames 'Costco cowboy' and 'butter bandit' – has started a side-hustle driving the 10-hour round trip from Taranaki to Auckland to stock up on cheap butter for his community. Halverson, who started a Facebook page offering to deliver Costco goods to his region, was inundated with requests for butter. 'Demand was crazy – there were quite a few people wanting five to 10 packs each,' he told news outlet Stuff. A Canterbury school recently used butter to fundraise, instead of the usual baked goods or chocolate. Leithfield School principal Rob Cavanagh told Stuff the response to the fundraiser had been 'pretty overwhelming', with 19,000 blocks sold. 'I wasn't quite aware of what a popular commodity butter is in this day and age.' Meanwhile, some people are using social media to teach others how to make their own butter, and bakeries across the country have reported making the tough choice to either increase their prices or face closure. Owner of Kayes Bakery based in Southland, Luella Penniall, said she was frustrated at having to import cheaper alternatives, despite living in a country that produces so much dairy produce. New Zealand is the world's top dairy exporter, producing a third of the world's dairy trade. The industry represents about $11.3bn or 3.2% of New Zealand's GDP, and plays a significant role in regional economies. Penniall uses an Australian broker to find the best priced butter of the right quality, which often results in half her butter order being shipped from Australia. Kayes Bakery uses roughly three tonnes of butter every two months. The business is 'surrounded by dairy farms' and Penniall would prefer to use New Zealand products but the cost can be prohibitive. 'Farmers deserve everything they get, they work hard, but somewhere in between it seems to be getting out of control.' Global supply problems and high demand for New Zealand's products are driving local prices higher, according to the chief executive of Infometrics, Brad Olsen. About 95% of New Zealand's dairy products are exported, which means the international market determines domestic prices. It is 'a double-edged sword', where high prices are good for the country's economy but tough for domestic shoppers, Olsen said. 'I'm not saying that at the moment its the right happy balance, but given that commodity prices … are going to be dictated by the international market, that is sort of how the game is played.'
RNZ News
15-05-2025
- Business
- RNZ News
Why rising dairy prices are a double-edged sword
Photo: Sorin Gheorghita for Unsplash Soaring dairy prices revealed this week , particularly for butter, are a double-edge sword according to one senior economist. Dairy prices were the main driver for food prices rising at their fastest pace in more than a year in the latest Stats NZ figures. The food price index shot up 3.7 percent. But within that figure, butter prices were up 65 percent, while milk was up 15 percent and cheese 24 percent. Stats NZ said the average cost of for 500 grams of butter was $7.42 in April. Informetrics principal economist Brad Olsen told Morning Report those prices are a double-edged sword. "For primary New Zealand those higher prices coming through for dairy and meat is good for those on farm earnings. "And that's money that then gets re-spent into the local economy and why we see rural New Zealand in a better place than urban centres," he said. But he said while higher international prices give farmers more money, it has meant higher retail costs for consumers. "You look at the butter price, 65 percent increase in a year, you don't often see numbers like that," Olsen told Morning Report. "Even the likes of your cheese and your milk prices... double digit increases are quite significant, so that's clearly hitting households." Olsen said he personally had friends looking for cheaper options like making butter at home. Sign up for Ngā Pitopito Kōrero, a daily newsletter curated by our editors and delivered straight to your inbox every weekday.
RNZ News
08-05-2025
- Business
- RNZ News
Here's how much butter prices might still have to rise
Photo: Sorin Gheorghita for Unsplash Shoppers are turning away from butter as prices soar - and there's a warning retail prices could get another dollar higher. As global dairy prices have soared, so too has the retail price of butter. Stats NZ recorded the average price of a block of butter in March at $7.33, up 10 percent from its December level of $6.66. In Woolworths this week, home brand butter was selling for $8.49. The Global Dairy Trade auction price for butter has risen from US$6631/MT in December to US$7992 in the latest auction. A spokesperson for Woolworths said the supermarket was trying to keep butter prices as low as possible. "With the recent rise in price, early trends are showing a minor reduction in the volume of butter purchased. The driving factors here consist of customers switching to dairy or table spreads, reducing their butter buying frequency, or ceasing purchases altogether. "Market conditions have changed significantly in the last few months and international butter prices are now at record highs. While this is great news for our farmers, it does mean we have to pass on these increased prices to our customers, which is why we've changed the shelf price for butter products." Gareth Kiernan, chief forecaster at Infometrics, said Woolworths' home brand butter had increased from $7.19 in the last time he bought it, to its current price of just under $8.50. "The strongest correlation appears to be about a four-month lag between GDT price movements and retail movements, so current butter prices at the supermarket might only reflect GDT pricing up to January. "The GDT butter index (priced in USD) has risen another 16 percent since January, mitigated by a 6 percent recovery in the USD/NZD exchange rate, resulting in a rise of almost 10 percent in NZD terms. On that basis, further increases of another 50c to $1 per block look possible by September, taking prices for the supermarket brands to as high as $9.50." ASB senior economist Mark Smith said it was to be expected that at consumers would reach the limit of what they were prepared to pay. "The reason probably why also that the butter prices have been so high is that the dairy supply is being reasonably constrained in, in the European market. And it's contributing to what we're seeing here." He said US tariffs could have an impact on the flow of dairy products around the world. "We do send quite a lot of dairy products to to the US, but they could well be diverted to other markets. "So certainly dairy prices will be higher for US consumers. For New Zealand consumers, we could see the reverse if if some product that was heading for the US actually headed elsewhere..." But he said demand for New Zealand product was likely to be strong given the country was an efficient producer, although overall tariffs would have a dampening effect. Smith said the increase could put pressure on inflation in the coming months. "Unfortunately inflation as a whole looks like it's going to be picking up in the middle of this year and if anything will be pretty close to 3 percent ... which is pretty awkward for Reserve Bank that is trying to make sure the New Zealand economy doesn't unduly suffer, yet we've still got inflation remaining high." He said there were enough signs that the labour market was still very soft and wage inflation cooling which would help, but it would be awkward for the Reserve Bank in the near term. Sign up for Ngā Pitopito Kōrero, a daily newsletter curated by our editors and delivered straight to your inbox every weekday.
