Milk prices up, veges down in September

Milk prices made their the biggest jump since July 2007.

New Zealand food prices were unchanged in September as cheaper vegetables coming into season were offset by more expensive fresh milk and pork.

The food price index was unchanged last month from a 0.5 per cent fall in August, according to Statistics New Zealand. Food prices are up 1.2 per cent from September 2012, the biggest annual increase since February last year.

The price of veges dropped 7.4 per cent in September, with tomatoes and lettuce coming into season, though that was offset by a 6.4 per cent jump in the price of fresh milk, its biggest gain since July 2007, and a 6.2 per cent rise in the price of pork.

Fruit and vegetable prices dropped 4.3 per cent last month, the only sub-group to decline, while meat, poultry and fish prices and grocery food prices both rose 0.9 per cent. Restaurant meals and ready-to-eat food prices were up 0.8 per cent while non-alcoholic beverages increased 0.1 per cent.

Grocery foods account for about 38 per cent of household spending on food, followed by about 21 per cent on eating out and takeaways, 16 per cent on meat, poultry and fish, 14 per cent on fruit and vegetables, and 11 per cent on non-alcoholic beverages.

On an annual basis, fruit and vegetable prices were down 0.3 per cent, while grocery food prices rose 2 per cent, non-alcoholic beverages increased 1.9 per cent, restaurant meals and ready-to-eat foods were up 1.1 per cent and meat, poultry and fish prices increased 0.3 per cent.

Food prices account for about 19 per cent of the Consumers Price Index, which showed an annual pace of inflation of 0.7 per cent in the June quarter, the slowest pace since 1999.

The CPI for the three months to Sept 30 is due for release next week, and ASB economists predict quarterly price growth of 1 per cent in the period.