Lower food prices due to bumper crops can be seen in data showing sharp declines in the prices of many veggies in January. Freight disruptions are continuing due to geopolitical events.
Stats NZ has today reported a 4.0 percent pa increase in the Food Price Index (FPI) – its official monthly measure of food price inflation in New Zealand – for January 2024.
By comparison, Foodstuffs has recorded a 3.9 percent pa average price increase at its two co-ops’ 500+ stores for the same categories measured in the FPI basket compared to a year ago.
Many fresh food favourites like tomatoes and avocados decreased in price year-on-year – some by over 20 percent – which Foodstuffs experts put down to bumper produce supply at the right time of year.
Foodstuffs NZ’s Managing Director, Chris Quin, said the co-ops’ ongoing efforts to keep prices as low as possible for shoppers have been assisted by this year’s warm summer.
“There are real benefits to shopping seasonally if you’re looking for value right now because the prices of produce and meat fluctuate depending on the supply level,” said Quin. “So when something’s in season and abundance because of a bumper crop, the prices tend to be lower.”
While Foodstuffs’ prices for the FPI categories were up an average of 3.9 percent pa in January compared to a year earlier, and supplier costs for the same categories rose an average of 5.8 percent pa, many fresh food favourites saw significant year-on-year price falls at Foodstuffs’ stores, including those shown below:
- Tomatoes ↓41 percent
- NZ Avocados ↓30 percent
- Courgettes ↓27 percent
- Red Capsicum ↓21 percent
- Fresh Lettuce ↓18 percent
Foodstuffs South Island’s Head of Produce, Justin Dykhoff, said greenhouse-grown veggies have been in good supply, bringing value at the checkout.
“Salad lovers have been spoilt for choice this summer thanks to the warmer temperatures and more sunshine hours,” Dykhoff said. “That’s meant great growing conditions for tomatoes, lettuce, cucumbers and capsicums, resulting in fantastic supply.”
Foodstuffs North Island’s Head of Produce and Butchery, Brigit Corson, said apple-picking is underway, so new season fruit is arriving at stores, relieving the tight supply.
“Pears will start to appear soon, too, as will locally grown melons,” Corson said.
“Kumara harvest has just started as well, which has been in short supply all year after last summer’s storms, and shoppers can expect better supply to start in March.”
Foodstuffs’ data shows popular fresh meat and dairy products were also cheaper in January than a year ago, on average, across the co-ops’ stores, namely: Pams 500g butter (down 18 percent), Pams 1kg mild cheese (down 13 percent), topside beef mince (down 12 percent) and lamb shoulder chops (down 6 percent).
Corson said shoppers should expect beef and lamb prices to fluctuate over the coming months.
“All the sunshine’s been making the grass grow well, so right now, farmers are focused on fattening up their stock, which means customers can look forward to more plentiful supply and lower prices as we head into autumn.”
The Foodstuffs co-ops have started to see container delays caused by the attacks on ships in the Red Sea. However, at this stage, it is not expecting severe shortages. Shipping companies are either going around South Africa, adding around three to four weeks to their journey, or through the Panama Canal, which is currently experiencing delays due to lower-than-usual water levels.
Chris Quin said the Foodstuffs co-ops’ commitment not to pass on extra shipping charges to shoppers still stands, and their buying teams are continuing to work hard to plug potential supply gaps of imported products.
“There’s a possibility the longer travel times out of Europe could lead to a container shortage, which may affect imports out of other markets. However, this is a medium risk with no impacts at this stage.”
“The general message to shoppers is that prices can go up and down due to weather and war. These unforeseen events are challenging to anticipate, and our experts are laser-focused on ensuring the essentials still get through and that we continue to deliver value at the checkout.”
