Soaring butter prices have been the focus of media attention in recent months as record dairy export prices have flowed through to the supermarket aisles.
The average price for butter was $8.42 per 500g, up 51.2% annually and a monthly increase of 13.5%.
Cheese was $13.04 per 1kg block, up 30.1% annually.
And milk was $4.57 per 2 litres, up 15.1% annually.
The increase in the meat, poultry and fish group was driven by higher prices for beef steak and beef mince, up 18.6% and 13%, respectively.
Meanwhile, the news was better for rental prices.
The monthly Selected Price Index (which measures about 51% of the quarterly Consumers Price Index) showed rents up 2.8% for the year.
That followed a 3% increase in the 12 months to April 2025.
The 2.8% increase is the lowest increase for rent prices since January 2015, when prices also increased 2.8%.
“Annual rent price increases haven’t been below 2.8% since 2011,” Growden said.
“Today’s figures suggest annual CPI inflation will likely remain parked towards the upper part of the 1-3% target range for much of 2025, said ASB senior economist Mark Smith.
Today’s release prompted Westpac to upgrade its CPI forecast to 2.8% for the June quarter.
“Under the surface, domestic inflation is easing, but only gradually,” said Westpac senior economist Satish Ranchhod.
“However, the early softness in imported inflation has turned around, pushing overall inflation higher.”
On a monthly basis, food prices were up 0.5% in May 2025, following a 0.8% rise in April 2025.
More expensive tomatoes, avocados and cucumbers drove the increase for fruit and vegetables, while higher prices for chicken nuggets and lamb leg drove the increase for meat, poultry and fish.
However, grocery prices were down for the month, by 0.7%.
Instant coffee prices fell 6.1% for the month following a spike of 10.4% a month earlier.
Liam Dann is business editor-at-large for the New Zealand Herald. He is a senior writer and columnist and also presents and produces videos and podcasts. He joined the Herald in 2003.
