The latest statistics show that food price inflation in New Zealand is trending upward.
The Foodstuffs co-ops expect shipping and market disruptions from the US-China tariffs over coming months.
Stats NZ reported an annual food price inflation (FPI) rate of 3.5 percent in March 2025, while the Foodstuffs Co-ops recorded an average 2.8 percent year-on-year rate for their comparable FPI basket.
The Foodstuff co-ops have been monitoring FPI across their stores since mid-2022. They measure the prices of a basket of goods in the same categories that Stats NZ monitors, using the same methodology and weightings.
Foodstuffs NZ Managing Director Chris Quin said while annual FPI has been between one to three percent for the past six months, Stats latest result suggested an upward trend occurring overseas too.
“Global supply and demand and geopolitical events play a huge part in New Zealand food prices. World Bank data shows food commodity prices are still more than 25 percent higher than five years ago, in March 2020, when the Covid crisis began, and now we have a new challenge in the form of a trade war between China and the US,” said Quin.
“Our co-ops’ logistics teams say shipping costs, which have been favourable into New Zealand over the past year have now reached the bottom and likely to go up. Uncertainty in trade due to the new tariffs will likely have consequences, with schedules disrupted and shipping costs rising.”
He added until now, China and the US have been buying billions of dollars a year of each other’s food exports. Hefty tariffs mean those goods are now likely to be diverted elsewhere. How that affects New Zealand customers remains to be seen – it could push some food prices up and others down.
Foodstuffs’ buying and logistics teams will be working hard to get the best prices on behalf of local store owners and their shoppers.
March’s FPI figures pre-date the latest tariffs, and key drivers behind the co-ops’ 2.8 percent rate included a -5.7 percent decrease for produce versus a 5.6 percent increase for meat, poultry and fish.
At a product level, the biggest year-on-year increases were 64 percent for butter and 72 percent for lamb legs.
“There’s a lot of pressure on retail prices for butter, cheese and milk due to global demand for our milk solids. The Global Dairy Trade index is now almost 50 percent higher than just 18 months ago. So, while we celebrate the benefit of that for the wider economy, it does affect local prices.”
Lamb leg prices were up in March too, thanks to strong offshore demand but also as a result of the difference in the timing of Easter this year, and the sharp deals Foodstuffs' stores offer in the lead up to it. Last year it was in March, whereas this year it’s in April, hence the price difference, year-on-year.
Foodstuffs’ supplier costs rose 3.3 percent in March (YOY) for goods in the co-ops’ FPI basket. Earlier, Infometrics reported a 2.0 percent annual rise in the Grocery Supplier Cost Index, across 60,000 goods. Supplier costs comprise an average two-thirds of the shelf price of goods at Foodstuffs’ stores.
“Our produce specialists say values have been good, with no shortages. Colder weather is setting in, though, which could see some prices rise. Ongoing dry conditions in the east and north of the North Island will impact some crops down the track, however the recent rain should help.”
