Spring has sprung, the grass has riz, I wonder how the prices is?
They’re down, at least those of fresh vegetables are, and that has contributed to a drop in the Food Price Index for the second month in succession.
Anyone with even a passing knowledge of the relationship between seasons, vegetable growing and basic economics won’t be surprised.
The warmer weather promotes growth, spring vegetables come on to the market and the increase in supply leads to a fall in prices.
Federated Farmers president Bruce Wills says th FPI drop is proof that the marekt is working to deliver fair prices.
“If you look at the food staples, like vegetables, bread and some meat, there’s actually been a fall and that needs to be acknowledged.
“While vegetables usually fall at this time of the year, I need to point out some big falls in beef and lamb because they’ve been subject to some comment.
“Milk of course remains steady due to Fonterra’s retail freeze. Despite this, one of our Wellington staff said his local dairy, the Standen Foodmarket in Karori, is selling four litres for $6.90; $1.73 a litre.
“All of these things have helped contribute to a one percent fall for September. This latest fall follows on from a 1.3 percent fall in August.
“Looking at the year to September, food prices are up 4.7 percent and are pretty much inline with inflation. We mustn’t forget that half of the increase is due to last October’s GST increase. . . “
Food prices have been relatively cheap in New Zealand. That is no longer the case and given the growing demand for food that is unlikely to change in the short to medium term.
However, prices are still usually a fair reflection of the costs of production and growing your own or buying food in-season is the best way to make the budget stretch further.