Cost of fruit and vegetables up 16% in a year

New figures released today show the cost of fruit and vegetables increased by 16% in the last year - and some warn the cyclone is only going to make it worse.

Stats NZ's monthly Food Price Index was released on Tuesday, showing overall food prices had increased 10.3% in the year ended January 2023.

Meat, poultry and fish prices had increased 9.2% since January 2022, grocery food 11%, non-alcoholic beverages 7.1% and restaurant and ready-to-eat food 8.3%.

It's prompted the Act party to criticise the Government, saying it is not doing enough to address the cost of living crisis, but the Government rejects that.

United Fresh is a non-profit organisation which represents the produce industry, including seed producers, growers, packers, wholesalers, marketers and importer/exporters.

Its president Jerry Prendergast said the range of challenges facing growers meant consumers should be prepared for "continued disruption to fresh produce pricing and availability".

“Cyclone conditions in the North Island are delivering more rain to growers already struggling with washed-out crops. Some of our Pukekohe growers were reporting losses of up to 30%t from January’s adverse weather.

"Every flood event can equate to weeks of lost production as well as disruption to key logistics such as transport and seasonal work like kiwifruit thinning."

He said industry costs were at an all-time high, including the price of fuel, fertiliser and labour.

"The wet weather systems have put more pressure on a supply chain that was already struggling."

However he said shoppers can still expect fresh produce at the supermarket and shops.

“What we need is for consumers to be flexible with their meal planning, look for the affordable seasonal offerings and be prepared to try different varieties of produce if their family favourite is low in supply. Fresh fruit and vegetables in season still offer good value when compared to many other popular supermarket choices."

The release of the Food Price Index comes just a day after an Infometrics report showed the cost increases from grocery suppliers to supermarkets was up 10% in January.

Foodstuffs NZ managing director Chris Quin said the summer floods were likely to add further challenges to inflation at the checkout.

He said adverse weather events were proving to be the wild card for growers, manufacturers and retailers of food nationally.

"The recent devastating floods have hit Auckland’s vegetable growing regions hard at a critical time of the growing season and are making things challenging for our whole food ecosystem from paddock to plate.

"Auckland’s wettest January on record has been really tough for local growers, with the long-term impact of the floods on crops like onions, lettuces and some root vegetables still to be felt."

He said Foodstuffs was also facing ongoing flood-related logistical challenges and longer transport times due to road closures.

"Damage to infrastructure is meaning longer routes and driver hours and this is exacerbating the already chronic shortage of experienced drivers."

He said domestic price pressures remained high, including the tight labour market, pressure on wages and salaries, persistently high fuel - diesel - costs, and high feed and fertiliser costs for suppliers.

Shipping costs had started to drop, however, he said, but were still up 4% in January compared to the same time last year.

Act leader David Seymour said the food price index was "reality calling" for the Government.

“It confirms in numbers what people feel every day at the checkout."

He said what Labour had done to address food prices "ain't working".

“Prices are going up in part because there are not enough people to work and produce food. Unemployment rates are low, but the labour shortage persists. There should be an uncapped RSE (recognised seasonal employer) scheme so that there is not a shortage of seasonal workers every year."

He said Prime Minister Chris Hipkins had been unable to make the "tough calls" to take on the cost of living crisis.

“He couldn’t bring himself to remove fuel and public transport subsidies that continue to drive inflation, and he is putting more pressure on production by further raising the minimum wage. Food prices won’t go down until he can take the pressure off producers and prevent wasteful spending.

“As well as a reduction in spending by the government, Kiwis need more money in their pockets."

He said the Act party's alternative budget reduced expenditure by $7.2 billion "without touching frontline services" and taxes can be lowered so someone on the average wage saved $2000 a year.

Finance Minister Grant Robertson said the Government had done "a number of things" to support people directly in the cost of living crisis, including recently continuing the fuel excise duty cut, and cutting road user charges.

"That influences the price of food through the transportation of food to supermarkets."

He said the Government would continue to find ways to support New Zealanders through the economic times, particularly low and middle income earners.

"I continue to be concerned about the costs New Zealanders are facing, and food is obviously the most immediate one of those."

He said cutting GST from fruit and vegetables - part of a policy often extolled by Te Pāti Māori - would not necessarily deliver what New Zealanders wanted or needed "in the immediate term".

Te Pāti Māori co-leader Debbie Ngarewa-Packer said taking GST off kai had to be a priority.

Asked if taking GST off food could be a deal-breaker in post-election negotiations, Ngarewa-Packer said the deal-breaker would be "putting our whānau who are in pain first".

"This Government could be doing more."

Food prices increased 10.3%t in the year ended January 2023.

In January 2023 compared with January 2022:

Fruit and vegetable prices increased 16%

Meat, poultry, and fish prices increased 9.2%

Grocery food prices increased 11%

Non-alcoholic beverage prices increased 7.1%

Restaurant meals and ready-to-eat food prices increased 8.3%

Source: Stats NZ