KEY POINTS:
Shoppers can expect price rises on all the supermarket shelves as the full force of the global food crisis is felt in New Zealand.
An average trolley of food cost 28.5 per cent more this week than a year ago, mainly because of huge price increases in dairy products.
A Weekend Herald survey of industry bodies, major producers and economists found unanimous agreement that all other major foods will go up this year - if they haven't already.
As well as comparing the trolley, this week's international prices of grain and oil were compared with those of a year ago. Corn/maize was up 48 per cent, wheat 76 per cent and oil 58 per cent.
The survey found the food producers under the most pressure to pass on those costs are those who rely on increasingly expensive grain to feed stock.
Chicken has already risen by up to 25 per cent in some shops.
Pork has held its value, but is likely to go up by 10 to 15 per cent, says the Pork Industry Board.
"The price of pig meat will go up, possibly with a reasonable sort of whack," said chief executive Sam McIvor.
Wheat is the most expensive of all the grains and the price of bread has risen and will go up further.
The price of flour is rising and India recently banned its export in a sign of global demand.
Wheatgrowers and breadmakers said that because current product was based on earlier and cheaper contract prices, not all of the increases had filtered through.
Goodman Fielder, New Zealand's biggest bread producer, said it expected its costs to increase by $220 million this year - the same as last year's profit. It had been absorbing increased bread costs, but said there was an overhang that would have be passed on if wheat didn't drop.
New Zealand beef and lamb does not rely on grain for feed, but overseas producers do and their rising costs will set the international price.
New Zealand Beef and Lamb expects those increases will affect prices here later in the year.
All food producers said the increasing cost of oil was another cost to be passed on.
Fuel was a particularly big cost for fish, which is also enjoying strong international prices, and the Seafood Industry Council said the increasing costs of other foods could pull its price up too - even though it was not affected by the same cost factors.
Horticulture NZ said fruit and vegetable prices would rise because of cost increases, and also because of extra demand as world supply tightened because of land used for vegetables was being converted to more profitable crops such as wheat.
Dairy prices had the same rising costs, but the price boom was further assisted by rising demand from the emerging middle classes in China and India.
Foodstuffs, which owns the New World, Pak'n Save and Four Square supermarkets, said it had little room in its margins to absorb the increases.
And Hunua farmer John Sexton said that with the planet's population expected to grow from 6.5 billion to 8.9 billion by 2050, "just how we are going to survive, I'm not sure".
"Power, transport, fertiliser costs have gone up considerably. It looks like the end, not just of cheap food, but of cheap everything.
FOOD BILL UP 28%
AND STILL RISING
DAIRY
Soaring prices will stay high. Higher international demand and rising production costs are unlikely to change. A decrease is possible only if the supply of dairy products can outstrip rising demand.
BEEF & LAMB
Prices are holding, but increases are expected this year. Overseas producers rely on grain as feed and therefore have rising costs. As an exporter, New Zealand will follow the global price.
POULTRY
Chicken prices will continue to go up. Prices have risen up to 25% in some shops over the past year but the industry says it is severely affected by the high price of grain and still has costs to pass on. Eggs are in the same basket.
PORK
Expect price rises of 10-15%, says the industry. It is under similar pressure to chicken, but prices have had to stay down because it competes against imports and there has been a glut in the international market as producers dump pig meat to get out because of rising costs. A market correction will come.
FISH
Rising, and no change likely. Fuel is a big cost in fishing. Strong international prices for fish mean some domestic supply will be diverted to export. Booming prices for other foods will pull the price of fish up even though it is not affected by the same factors.
GRAIN-BASED PRODUCTS
Bread prices will keep rising as the "phenomenal" global price of wheat is passed on to consumers. Anything using wheat will become more expensive.
FRUIT AND VEGETABLES
Prices will go up in the next six months as energy, fuel, labour and fertiliser costs are passed on. Supply will tighten worldwide as land set aside for vegetables is changed to more profitable uses, such as growing grain.
HERE'S WHY
The soaring price of food in New Zealand is directly linked to the world food crisis.
Several factors have combined to create that crisis, which has been described as the "silent tsunami" because it has accelerated rapidly and now threatens to cause political instability in some countries.
DEMAND
People in China and India are eating more grain and meat as they grow richer, which puts pressure on commodity prices. The Chinese are discovering a taste for dairy foods, which keeps milk prices high - and flows back to New Zealand farmers.
BIOFUELS
Rising amounts of corn are being used to make the green fuel, which makes it more expensive for farmers who feed it to stock. Europe is so concerned that it may cut biofuel targets and slash production subsidies.
OIL
Record oil prices flow through to the farm gate - they make fertiliser more expensive, and increase the cost of getting products to market.
CLIMATE
Australia's long drought slashed the size of its wheat harvest,
reducing the amount it could export.
RESPONSES
Governments in hardest-hit nations have imposed export bans, ordered price controls, subsidised consumers, imposed tariffs and appealed for emergency aid. But in curbing prices, the same countries have come under attack from their own farmers who get less for their products - and have less incentive to grow more food.
