Dairy giant New Zealand endures butter price shock
WELLINGTON : Butter prices have soared in dairy export giant New Zealand, latest figures showed today, with local supplies cut short as the industry chases fatter profits overseas.
The dairy price shock spreads as far as cheese and milk, leading one economist to suggest locals face the grim prospect of cereal without milk if they want to save money.
Butter prices leapt 46.5% in the year to June to an average of NZ$8.60 (US$5.09) for a 500g block, according to official data from Stats New Zealand.
Milk prices surged 14.3% over the same period, while cheese shot up 30%.
High dairy prices have hit the headlines in New Zealand, with media outlet Stuff reporting that 'exorbitant' prices are unlikely to 'melt away' any time soon.
Wholesale and retail store Costco restricted butter sales to a maximum of 30 blocks per customer in June, but still sold out, according to the New Zealand Herald.
The prices are hurting consumers, said independent economist Brad Olsen, chief executive of Infometrics.
'At the moment, I'm going with any other alternative I can find,' Olsen said of butter prices.
'I'd also say, the cheap option for breakfast at the moment seems to be to try cereal without the milk.'
'The phenomenon was driven by international prices and demand,' Olsen said.
Creaming off profits
'Butter supplies had failed to keep up with rising demand over the past two years,' he said.
'New Zealand exports the vast majority of our dairy products. So if you're a company that's exporting butter, you've got to make a decision.
'Do you sell it at the international price overseas, or do you sell it cheaper in New Zealand?' the economist said.
'No business is going to sell it cheaper… if they can get a better price overseas,' he added.
However, while New Zealand consumers were feeling the price pinch, the overall economy was benefiting as exporters creamed off larger profits from sales overseas.
'The sort of returns that our farmers and the primary sector more broadly are getting, and the economic benefit that brings, is actually far more substantial,' Olsen said.
'It's an extra NZ$4.6 billion (US$2.7 billion) that has been flowing into the economy from the higher dairy payout. That's a significant boost,' he added.
'New Zealand butter lovers are actually faring better than some,' he said, adding they still pay 46% less than Americans.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Malay Mail
4 hours ago
- Malay Mail
Lamb-grab: New Zealand farmers fight back as pines take over pasture
WELLINGTON, July 28 — New Zealand sheep farmers are fighting to stop the loss of pasture to fast-spreading pine plantations, which earn government subsidies to soak up carbon emissions. Concern over the scale of the farm-to-forest switch led the government to impose a moratorium in December on any new conversions not already in the pipeline. But farmers say forestry companies are flouting the clampdown. Last month, farmers launched a 'Save our Sheep' campaign to reverse the loss of productive farmland. Sheep numbers have plummeted to around 23 million, down from a peak of around 70 million in the 1980s, according to official figures. Falling wool prices and rising milk and beef costs initially drove the decline, but the emissions trading since 2008 has added to the strain. The government is now investigating potential breaches of its moratorium by forestry companies, which have been buying up farmland as recently as June. Federated Farmers — a lobby group for rural communities — submitted to the government 'a list of properties we believe have been sold for carbon forestry' since the halt, a spokesman said. The federation is concerned about the sale of more than 15,200 hectares (37,600 acres) of farmland, he told AFP. Dean Rabbidge, who runs a farm outside the Southland town of Wyndham, said some of the newly purchased farms had already been planted with pine trees. 'Criminal' 'They're just ploughing on ahead, effectively giving the middle finger to the government announcement,' Rabbidge told AFP. The moratorium had created a 'gold rush', he said. 'It's criminal what's happening.' Agriculture and Forestry Minister Todd McClay said the government would change the law by October because it had become more profitable to plant pine forests than to farm sheep. 'The law will include clarity on what qualifies as legitimate evidence of a pre-December investment and enable any specific cases to be properly assessed,' McClay said. 'Anyone who has bought land since December 4, 2024, irrespective of whether they also had trees or not, will not be able to register this land into the emissions trading scheme.' Rural New Zealand once abounded with rolling pastures, rickety wire fences hemming in millions of sheep chewing on the green grass. But Rabbidge said those days were gone. 'You won't see anything now,' he said. 'You're just driving through long pine tree tunnels — shaded, wet, and damp.' New Zealand sheep farmers are fighting to stop the loss of pasture to fast-spreading pine plantations, which earn government subsidies to soak up carbon emissions. — AFP pic New Zealand is one of the rare countries to allow 100 per cent of carbon emissions to be offset by forestry. 'We're not anti planting trees,' sheep farmer Ben Fraser told AFP. 'There are areas of land that should be retired, that aren't necessarily productive.' But the trading scheme had driven an excessive loss of sheep pastures to forestry, he said. 'That's the issue here.' 'So short-sighted' Fraser, who farms near the North Island town of Ohakune, said he had seen an exodus of people from the district in recent years. 'Since 2018, there've been 17 farms converted to forestry,' he said. 'That's about 18,000 hectares gone. So you're looking at about 180,000 sheep gone out of the district, plus lambs.' The loss of sheep impacted the region. 'If the farms thrive, then the towns thrive because people come in and spend their money,' he said. 'You've got farm suppliers, your fertiliser guys, your supermarkets, your butchers, all of that stuff struggling. 'The local schools now have less kids in them. The people who stayed are now isolated, surrounded by pine trees.' Rabbidge said the same was happening in Southland. 'This whole thing is just so short-sighted,' Rabbidge said. 'Businesses here are forecasting anywhere between a 10 and 15 per cent revenue reduction for the next financial year, and that's all on the back of properties that have sold or have been planted out in pine trees,' he said. 'Lamb on a plate' 'Think of all the shearers, the contractors, the transporters, the farm supply stores, the workers, the community centres, the schools, rugby clubs. Everything is affected by this.' Government figures from 2023 show agriculture accounted for more than half of New Zealand's total greenhouse gas emissions. But farmers argue they have been working hard to reduce emissions, down more than 30 per cent since the 1990s. 'I could put a leg of lamb on a plate in London with a lower emissions profile, transport included, than a British farmer,' Rabbidge said. 'We just use our natural resources. We're not housing animals indoors and carting feed in and manure out. 'Everything's done outside and done at low cost, low and moderate intensity.' — AFP
Barnama
18-07-2025
- Barnama
ASEAN Centre For Energy Receives NZ$200,000 Grant From New Zealand
JAKARTA, July 18 (Bernama) -- The ASEAN Centre for Energy (ACE) has received a NZ$200,000 (about US$119,300) grant from the New Zealand Foreign Affairs and Trade Ministry to support the region's energy transition and the implementation of the ASEAN Plan of Action for Energy Cooperation (APAEC). The contribution marks the first direct partnership between ACE and New Zealand, commemorating 50 years of ASEAN-New Zealand relations and reinforcing their shared commitment to sustainable energy development in the region. ACE Executive Director Datuk Abdul Razib Dawood described the grant as a significant milestone in regional energy cooperation, expressing gratitude to New Zealand for its continued support.
Malay Mail
18-07-2025
- Malay Mail
Don't just study — embrace local culture, Zahid tells Malaysians in New Zealand
WELLINGTON, July 18 — Malaysian students abroad have been reminded not to focus solely on academics, but also to engage with the local communities to foster cross-cultural understanding. Deputy Prime Minister Datuk Seri Dr Ahmad Zahid Hamidi stressed that the involvement in local communities and understanding their cultures are vital for nurturing well-rounded and reputable graduates. 'Don't just learn from inside the lecture rooms, tutorials, or professors' offices. 'We should also introduce ourselves to the local communities and learn their cultures, especially the Maori culture here, which is rich with historical values and a spirit of resilience,' he said during a gathering with over 250 Malaysian students and residents in New Zealand, here. Also present were Malaysia's High Commissioner to New Zealand Mazita Marzuki, alongside official delegates and senior Malaysian government officers. In his remarks, Ahmad Zahid also expressed his admiration for the Maori community's strong identity and spirit, highlighting their success in preserving cultural heritage while managing community economic assets through their trust agencies since the 19th century. 'I would like to congratulate the Maori leaders and community here. We need to learn from their spirit and strength in fighting for their rights and adapt that to the Malaysian context, especially in empowering the Orang Asli communities,' he said. The deputy prime minister also praised the achievements and positive image upheld by students sponsored by various agencies, including the Public Service Department (JPA), Majlis Amanah Rakyat (Mara), government-linked companies (GLCs), and government-linked investment companies (GLICs). He said social assimilation and cross-cultural understanding are critical components in shaping competitive individuals ready to return and serve the nation. Highlighting Malaysia's demand for professionals in critical fields such as engineering, law, and accounting, Ahmad Zahid urged students to consider returning home to contribute to national development after completing their studies. While acknowledging that salaries in Malaysia might be lower compared to countries like New Zealand, he stressed the importance of their services to fuel the country's growth and economy. 'I urge you to come home, especially those in engineering, law and accounting. I know salaries in Malaysia may be lower compared to New Zealand, but remember, east or west, home is best,' he said. At the event, the deputy prime minister also announced a NZ$100,000 (RM251,000) allocation to Rumah Malaysia to support preparations for Malaysia's National Day celebrations this year. — Bernama
