Shoppers can expect to pay more for milk and cheese in supermarkets after overseas buyers paid nearly $3 billion more for New Zealand dairy in the past year, one economist says.
ANZ agriculture economist Susan Kilsby said the increase in value of dairy exports would have some impact on what New Zealanders paid for dairy products.
The total export value of milk powder, butter, and cheese increased by $2.8b (17%) to $18.8b in the year to July 31.
Kilsby said export prices were not the only factor that affected domestic prices, but the shelf price followed international trends over time.
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However, domestic prices would not jump as much as international prices.
International trade statistics manager at Stats NZ Alasdair Allen said the annual increase was mostly driven by milk powder, up $1.1b to $10b , and milk fats, including butter, up $1.1b to $3.8b.
Milk powder, butter, and cheese made up 28% of total annual exports of all commodities, he said.
Fresh milk and cream were up $231 million, 21%, to $1.3b worth of exports, and cheese, up $112m to $2.2b.
Consumer NZ chief executive Jon Duffy said inflation was already hitting New Zealand households hard.
“Our latest sentiment tracker data shows an increasing number of New Zealanders are stressed about the price of food,” he said.
"The cost of food and groceries has risen up the list of financial concerns, from eighth to third, behind rent and mortgage payments. As a nation we’ve shifted from being concerned about covering costs impacting the long term, such as education, to focusing on the here and now – can I feed my family,” Duffy said.
Wage growth wasn’t keeping pace with the cost of living, and an increasing number of households were struggling for the first time as they navigated how to cover expenses and put food on the table, Duffy said.
Besides the main dairy commodities, there was an increase in casein exports in the past year.
Casein, the main protein in milk and cheese that isused as ingredient in processed foods, reached a record high of $1.6b up 48%.
Although the quantities of milk powder, butter, and cheese exported decreased by 9.1%, the average unit price increased 28%, from $4.82 to $6.16.
Stats NZ said on Monday grocery food prices increased by 8.7% in August compared to a year ago.
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