Food prices record first annual fall in six years

Food prices fell 0.7 percent in May 2010 and by 0.5 percent for the year to May, Statistics New Zealand said today. This is the first annual fall in food prices since the year to July 2004.

For the year to May 2010, lower prices were recorded for meat, poultry, and fish (down 4.5 percent) and fruit and vegetables (down 4.5 percent). Meat, poultry, and fish prices have now returned to levels last seen in September 2008 and are 7.1 percent lower than their peak in 2009. Fruit and vegetable prices have been falling on an annual basis for nearly a year.

The 0.7 percent fall in food prices in the May 2010 month followed a 0.5 percent fall in April and a 0.2 percent rise in March. "Food prices are back down to levels last seen in 2008 and are now 3.8 percent below their peak in July last year," Statistics New Zealand's prices manager Chris Pike said.

In May 2010, the meat, poultry, and fish subgroup decreased 2.4 percent. The key contributors were porterhouse/sirloin beef steak (down 16.2 percent) and fresh chicken (down 5.0 percent), both of which were influenced by discounting.

The grocery food subgroup decreased 0.7 percent in May 2010. This decrease was largely due to lower prices for potato crisps (down 5.8 percent) and chocolate bars and blocks (down 4.4 percent).

However, butter and cheddar cheese prices are on the rise, having increased 51.1 percent and 13.6 percent, respectively, over the past five months.

Fruit and vegetable prices decreased 2.1 percent in May 2010, with mandarin and kiwifruit prices falling 34.7 percent and 49.4 percent, respectively. Kiwifruit and mandarin prices typically fall in May as supply becomes more plentiful.