Winter Weather Fuels Food Price Inflation In June, Along With Dairy And Meat, But Olive Oil Decreases

• Stats NZ records 4.6% annual food price inflation (FPI) in June 2025
• Foodstuffs see retail prices rise 3.7% YOY for comparable FPI basket of products
• Wet and cold domestic weather conditions push produce prices higher
• Global prices for dairy and beef remain elevated but olive oil dips for first time in 18mo

The Foodstuffs grocery co-ops say winter weather played a part in the latest food price inflation statistics for June, with the product cost of dairy and beef still key contributors while olive oil prices finally fell.

Stats NZ has today reported an annual food price inflation (FPI) rate of 4.6% in June 2025, while Foodstuffs recorded an average year-on-year retail price increase of 3.7% for their comparable FPI basket of products – below total FPI for the 4th month in a row, and 31 of the past 38 months.

Average prices for milk, cheese and eggs were up 7.5% on June 2024, meat, poultry and fish rose 6.7%, and fruit and vegetables 4.6%. Products seeing the biggest year-on-year increases included cauliflower +49%, butter +44%, lamb leg roasts +37%, cheese +31%, and beef steak +25%.

Foodstuffs NZ Managing Director Chris Quin says June’s weather fuelled the higher FPI rate, after last year’s relatively settled winter allowed bumper crops and sharper prices.

“This year’s return to less settled winter conditions have meant slower growth rates and damage to some crops, leafy greens in particular. High power costs are hurting greenhouse growers too.”

Quin says high global prices for dairy, beef and lamb continue to have an impact here, although the rate of butter’s price rise in June, +44% YOY, was the slowest Foodstuffs has seen all year.

“While the price of butter has fallen at the last two Global Dairy Trade auctions, to 6% below its May peak, it’s still 55% higher than two years ago. Customers are feeling it and that’s why our co-ops are continuing to sell butter at a loss, to keep it as affordable as possible.

“We’re glad there’s growing recognition retail prices for our dairy and meat are largely determined by what the world is willing to pay. And what shouldn’t be forgotten when comparing prices here with Australia and the UK is they don’t pay GST on most grocery foods.”

On a positive note, olive oil was 4.6% cheaper than in June 2024 – the first month Foodstuffs has recorded a year-on-year price decrease for olive oil since January 2024.

“Olive oil supplies have rebounded in Europe, and further price reductions are possible, though at around $18 a litre it has a way to go before it gets back to where it was then, below $12.”

Foodstuffs’ retail price increases were again outpaced by supplier costs, up an average 5.4% year on year for products in the co-ops’ FPI basket.

“We’ve long said the key factors driving food price movements in New Zealand are global supply and demand, and domestic weather conditions. They influence what suppliers charge us for their goods, which in turn accounts for about two-thirds of the shelf price for customers.”

Notes:

Methodology

Stats NZ measures FPI by tracking the prices of individual items that make up a representative ‘basket’. Foodstuffs NZ measures the prices of a basket of products in the same categories Stats monitors, applying the same weighting and methodology to calculate a year-on-year rate.

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