High world food prices are good news for exporters and the New Zealand economy.
The United Nations food price index shows prices for staple food items – cereals, dairy products, meat, oils and fats and sugar – in December were higher than the last peak in 2008.
The first auction of the year resulted in a good boost to milk prices, meat prices are holding up and cropping farmers are getting better returns too.
The floods in Australia are already impacting on grain prices here, although if their milling wheat is downgraded to feed grain that will compete with local produce and counter some of the gains for New Zealand growers.
Flooding of of fruit and sugar cane will also lead to price increases.
In some years the wider economic benefit of rising prices for one group have been offset by falling prices for another but this time dairy, meat and cropping sectors are all receiving better returns.
Higher export prices will lead to domestic price increases which will put pressure on budgets for those on low incomes. But we’re a food exporting nation and our overall wealth and wellbeing depend on good prices for our produce.