Melted: Butter prices fall to 19-month low in February

The average price for a 500g block of butter fell to $5.20 in February. Photo / 123RF

Butter prices fell 10 per cent to a 19-month low in February, Stats NZ figures show.

The average price for a 500g block of butter fell to $5.20 in February, down from a recorded high of $5.79 recorded a month earlier.

Food prices rose 1.7 per cent on the year in February, driven by a lift in meat, poultry, and fish prices and restaurant and ready-to-eat food.

The lift was partly offset by the drop in butter prices.

"In January we saw milk prices fall to a 19-month low. This price fall now looks to be flowing on to other dairy products," consumer prices manager Gael Price said.

February prices fell 4.1 per cent for cheese, 6.7 per cent for yoghurt and 0.2 per cent for milk.

Global dairy trade auction prices fell between June and November 2018. These were reflected in lower dairy export prices in the December 2018 quarter. Prices, however, have since picked up.

Meat, poultry and fish prices rose 3.5 per cent on the year while restaurant meals and ready-to-eat food prices lifted 2.9 per cent, Stats NZ said. Fruit and vegetable prices were down 0.6 percent on the year while grocery food prices lifted 0.8 per cent and non-alcoholic beverages were up 2.7 per cent.

The 1.7 per cent annual rise was the largest since last April when food prices lifted 2.3 per cent on the year. They were up 0.8 percent on the year in January.

Food prices were up 0.4 percent from January, but after seasonal adjustment rose 0.7 percent. The monthly rise was largely due to a 4.1 per cent lift in soft drinks, water, and juices.

Soft drink prices rose 8.4 per cent, reaching $2.70 per 1.5 litre bottle, Stats NZ said.

The food price index accounts for about 19 per cent of the consumers price index, which is the Reserve Bank's mandated inflation target when setting interest rates.