Yes, that block of cheese is costing you less…

By Peter Griffin 20/01/2010

A common complaint among those of us who buy most of our food from supermarkets is that it costs significantly more to fill a shopping basket these days than it did a couple of years ago.

Cheese has become the benchmark for the affordability of food and, boy has a block of tasty cheddar gotten expensive! It may come as a surprise then to see the latest Food Price Index figures out from Statistics New Zealand, reveal the price of cheddar cheese has dropped a hefty 16 per cent. Even chicken which has been horrendously expensive is down a respectable 8.5 per cent. Good news then. Overall however, food prices increased 0.9 per cent in 2009 relative to 2008, despite a modest slide in prices towards the end of the year.

Still, looking more long term, food prices are up 10 per cent over the last two years! That’s largely thanks to the spike in staple foods we saw in 2008 when grain reserves around the world ran low. So cheese may look more affordable now, but we are still paying through the nose for it compared to a few years ago…

The key lessons – eat out less and cut down on fizzy drinks!

Statistics New Zealand notes:

Food prices increased 0.9 percent in the year to December 2009, following increases of 0.9 percent and 2.0 percent in the years to November and October 2009, respectively.

Three of the food subgroups increased in the year to December 2009. The most significant upward contributions came from higher prices for non-alcoholic beverages (up 6.6 percent) and restaurant meals and ready-to-eat food (up 2.8 percent). The grocery food subgroup also rose (up 0.3 percent).

The food subgroups which decreased were fruit and vegetables (down 2.1 percent) and meat, poultry, and fish (down 0.9 percent). The most significant upward contribution came from higher prices for soft drinks (up 9.5 percent), tomatoes (up 68.9 percent), and white sugar (up 34.4 percent).

The most significant downward contributions came from lower prices for apples (down 25.8 percent), chicken (down 8.5 percent), cheddar cheese (down 15.9 percent), and potatoes (down 14.7 percent).

While food prices have fallen 3.5 percent over the past five months and are 0.9 percent higher than a year earlier, they are 10.0 percent higher than two years earlier. This compares with an 11.4 percent increase in food prices from November 2007 to November 2009. Biennial increases in food prices have been decreasing from a high of 17.3 percent from June 2007 to June 2009.

Here’s the Food Price Index report for 2009 in full:
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And the latest Consumer Price Index data too…

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