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Food Price Index: August 2012
Embargoed until 10:45am  –  14 September 2012
Commentary

Food prices rise in August 2012 but decrease for the year

Food prices rose 0.1 percent in August 2012, following a rise of 0.2 percent in July 2012. Prices fell 1.3 percent in the month of August 2011.

Graph, Index points contribution to food price index, by subgroup, August 2012.

Food price index subgroups: August 2012
Subgroup Index points contribution to FPI Monthly percentage change

Fruit and vegetables
Meat, poultry, and fish
Grocery food
Non-alcoholic beverages 
Restaurant meals and ready-to-eat food

  2.83 
-0.01
-3.63
 1.77
-0.36
1.5
0.0 
-0.7
 1.3
-0.1
Food price index   0.61   0.1
Note: Index points contributions may not sum to total due to rounding.

In the year to August 2012, food prices decreased 0.5 percent, following 1.8 percent and 0.2 percent decreases in the years to July and June, respectively. This is the fourth consecutive annual fall in food prices.

Food price index subgroups: Year to August 2012
Subgroup Index points contribution to FPI Percentage change from August 2011
Fruit and vegetables
Meat, poultry, and fish
Grocery food
Non-alcoholic beverages
Restaurant meals and ready-to-eat food
1.39
-1.46
 -10.19 
0.64
  3.43
0.8
-0.7
-2.1
0.5
1.3
Food price index -6.18 -0.5
Note: Index points contributions may not sum to total due to rounding.

More expensive tomatoes push fruit and vegetable prices up

Monthly

Fruit and vegetable prices rose 1.5 percent in August 2012. Vegetable prices rose 2.1 percent, while fruit prices rose 0.7 percent.

Tomatoes (up 31 percent) made the main upward contribution. Tomato prices rose from an average of $9.58 per kilogram in July, to $12.52 per kilogram in August. This puts tomato prices at their highest level since the record high of July 2011, when they reached an average of $13.25 per kilogram. Higher prices were also recorded for apples (up 12 percent). 

Lettuce prices fell 19 percent. Prices typically fall for August, but the fall this August was larger than it has been in recent years. Lower prices were also recorded for broccoli (down 34 percent) and avocados (down 20 percent) which usually occurs in August.

Annual

In the year to August 2012, prices for the fruit and vegetables subgroup increased 0.8 percent. Fruit prices increased 11 percent while vegetable prices decreased 4.7 percent.

Tomatoes (up 26 percent) made the main upward contribution. 

Kumara prices increased 90 percent, reaching their highest level since February 2008. Prices were influenced by low prices in August 2011, and by poor weather conditions in both the planting and harvesting seasons, which affected this year's crop.

Higher prices were also recorded for avocados (up 33 percent).

Lettuce made the most significant downward contribution, decreasing 39 percent from an average of $8.55 per kilogram in August 2011 to $5.21 per kilogram in August 2012. The August 2010 average price was $5.93 per kilogram.

Broccoli decreased by about 50 percent, from an average of $8.89 per kilogram in August 2011 to $4.48 per kilogram in August 2012. The August 2010 average price was $5.56 per kilogram.

In the year to August 2012, lower prices were also recorded for cauliflower (down 52 percent) – up 29 percent from August 2010.

  Graph, Fruit and vegetables subgroup, monthly change, August 2011 to August 2012.

 Graph, Fruit and vegetables subgroup, annual change, August 2011 to August 2012.

Graph, Fruit and vegetables subgroup – selected indexes, monthly indexes, August 2009 to August 2012.

Graph, Fruit and vegetables subgroup – kumara, monthly indexes, June 2006 to August 2012.  

Grocery food influenced by falling dairy prices

Monthly

Prices for the grocery food subgroup fell 0.7 percent in August 2012, reaching their lowest level since January 2011. This was the fifth fall in six months for grocery prices.

Chocolate biscuit prices fell (down 9.9 percent), influenced by more discounting in August than in July. 

Prices also fell for cheddar cheese (down 5.2 percent) and butter (down 4.8 percent). After four monthly falls in a row, fresh milk prices showed no overall price change. The average price remained at $3.19 for 2 litres of the cheapest option of standard homogenised milk.

Bread prices (up 2.9 percent) made the most significant upward contribution, following a 3.0 percent price fall in July 2012. Higher prices were also recorded for sugar (up 4.0 percent).

Annual

For the year to August 2012, grocery food prices decreased 2.1 percent. This is the largest annual fall in grocery food prices since the start of the series in 1999. 

Lower prices for fresh milk (down 9.2 percent), butter (down 27 percent), and cheddar cheese (down 14 percent) made the most significant downward contributions. Fresh milk prices peaked in 2011, and were relatively stable until January 2012. Butter prices, which fell to 31 percent below their June 2011 peak, have had annual falls for the past 10 months. Cheddar cheese prices have had annual falls for the past 13 months.

Nuts (up 21 percent) made the main upward contribution for the year to August 2012. Prices were also higher for peanut butter (up 9.1 percent), reaching their highest level since the series began in June 1999.

Graph, Grocery food subgroup, monthly change, August 2011 to August 2012.                             Graph, Grocery food subgroup, annual change, August 2011 to August 2012.

Graph, Dairy products – selected indexes, monthly indexes, August 2009 to August 2012.

Summary of other food subgroups

Monthly

Higher prices were recorded for non-alcoholic beverages (up 1.3 percent) in August 2012. This was influenced by less discounting on fruit juice (up 5.7 percent) and soft drinks (up 1.0 percent).

Meat, poultry, and fish prices showed no overall change. Lower prices for porterhouse/sirloin steak (down 7.0 percent, influenced by more discounting), were partly offset by higher prices for lamb (up 6.8 percent, influenced by less discounting).

Slightly lower prices were recorded for restaurant meals and ready-to-eat food (down 0.1 percent).

Annual

Of the other subgroups, meat, poultry, and fish (down 0.7 percent) was the only subgroup to decrease for the year.

Lower prices for porterhouse/sirloin steak (down 11 percent) made the most significant downward contribution, with the largest annual decrease since the series began in June 1999. Lamb prices were 19 percent lower than in August 2011, the second largest annual decrease since the series began in January 1989. The largest annual decrease was recently recorded, in the year to July 2012. These falls were partly offset by an increase in the price of chicken pieces (up 9.2 percent).

Restaurant meals and ready-to-eat food (up 1.3 percent) and non-alcoholic beverage prices (up 0.5 percent) increased.

Graph, Food price and selected indexes, monthly indexes, August 2009 to August 2012.

Impact of items that rose and fell in price

The items that rose in price had a slightly smaller impact in August 2012 than in July 2012, while the impact of items that fell in price was slightly larger.

 Graph, Index points contribution to food price index, August 2011 to August 2012.

Distribution of item-level index movements
June 2012 to July 2012 July 2012 to August  2012
Increase in price
Number of items
Percentage of all items
Percentage of expenditure weight
Index points contribution
Weighted average price increase (percent)

81
50.3
46.4
23.0
3.9

78
48.4
47.2
22.5
3.7
No change in price
Number of items
Percentage of all items
Percentage of expenditure weight
3
1.9
2.7
5
3.1
2.3
Decrease in price
Number of items
Percentage of all items
Percentage of expenditure weight
Index points contribution
Weighted average price decrease (percent)
77
47.8
50.9
-19.2
3.0
78
48.4
50.5
-21.9
3.4

For more detailed data from the FPI see the Excel tables in the 'Downloads' box.

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