Latest news with #LuellaPenniall
Yahoo
22-05-2025
- Business
- Yahoo
Aussie household staple being snapped up by Kiwis as local price jumps by 65 per cent
A 'perfect storm' has led to butter prices increasing by more than 65 per cent over the last year in New Zealand, forcing one popular bakery to buy it from Australia instead. Kaye's Bakery owner Luella Penniall told Yahoo News she always tries to buy local butter, but lately the price has been too high. Her broker often advises her to import her massive multi-tonne order of butter from Australia, where she can make greater savings. 'It's craziness. There could be $1.50 a kilo difference, and when you're buying $50,000 or $100,000 worth at a time, that adds up to a lot,' she said. Contracts with retailers who sell her produce prevent her from suddenly altering her price, so continuing to always use local butter as the cost soars would come at a massive financial cost. Besides, increasing the price of her famous cakes, slices and biscuits would harm Kiwi shoppers who are already struggling with the cost of living. 'I'm a New Zealand manufacturer and I don't want my products to become unaffordable,' she said. Related: 🌏 Grocery shop brings New Zealand dad to tears after move to Australia Kiwi shoppers are also feeling the pinch at the country's three major supermarkets, Woolworths, PAKnSAVE and New World. At Woolworths, New Zealand-made 400-gram packs of Westgold sell for NZ$9.95 (A$9.16) locally, but the price drops to just $6.50 in Australian stores. While 250-gram packs of New Zealand's famous Mainland butter are selling for $8.90 ($8.15) in New Zealand versus $6.50 in Australian stores. According to an international supply chain expert, a major reason Kiwis are charged high prices for their own butter is that it's in high demand overseas, where it can be bought at a "good price" in greater amounts. 'New Zealand butter is a premium product, and it's really well recognised around the world,' Australian National University business and economics lecturer David Leaney explained. The New Zealand dollar is struggling due to concerns about a recession, China's slumping economy, and the threat of tariffs from US President Donald Trump. This makes it more affordable right now for overseas buyers to use their strong currencies to snap up Kiwi butter. Demand is also being driven by problems in the northern hemisphere with extreme weather and crop failure leading to shortages. This reduced competition is also leading to the New Zealand product attracting a premium. Big W quietly reintroduces controversial $122 Aussie product Coles, Woolworths, Aldi reveal fate of 11,000 tonnes of soft plastics Why farmers are also paying more to make butter Looking domestically, New Zealand farmers are facing ongoing pressures as drought continues to increase the cost of raising animals. Buying and transporting extra feed comes with an added cost. And when cattle consume supplementary feed rather than paddock grass the fat concentration of the milk is altered, further impacting the sale price. 'It's unusual for all of the international factors to line up all in the same direction. And it's even more unusual for all the domestic ones to do the same. It's a perfect storm at the moment,' Leaney said. Travelling around New Zealand, it's often astonishing to see how little local fresh fruit and vegetables are available in supermarkets. When orchards and backyard trees are sprouting lemons, oranges and apples, retail shelves are lined with American-grown fruit. This is driven by producers being locked into big international contracts, which buy a greater volume of food than local retailers need. 'Even if they wanted to sell locally at a higher price, they've already been lured in by big contracts,' he said. 'The same thing happens with Australia's natural gas. We signed some really big contracts to supply gas at a huge volume to overseas markets, with prices locked in. And even though we could sell it for more domestically, we can't, because we're locked into those contracts. 'You end up with gas going overseas, and then being imported back here at a higher price.' Leaney thinks increasing butter prices will be temporary, and the price will stabilise due to market forces. He compares the situation to eggs in Australia, where avian influenza outbreaks led to shortages and increased prices. While prices no longer seem to be increasing, they're unlikely to drop again unless economic drivers change. 'The problem is hard to fix. It self-adjusts because sometimes not all of the factors will keep aligning. Exchange rates could change, or the gap in the market will be filled by someone else. Once you become the most expensive option, then suddenly people will start looking for the second or third,' Leaney said. Love Australia's weird and wonderful environment? 🐊🦘😳 Get our new newsletter showcasing the week's best stories.
Scoop
22-05-2025
- Business
- Scoop
Southland Bakery Says Butter Too Expensive To Buy From NZ Dairy Companies
, Journalist Skyrocketing butter prices have forced a commercial bakery in the dairy heartland of Southland to scour the global market for cheaper alternatives. Kaye's Bakery in Invercargill sells belgian biscuits, afghans and other sweet treats in supermarkets and dairies nationwide, often using butter from Australia to make its products. Luella Penniall owns the family business started by her parents Lois and Evan in the 1970s. She orders in 10 tonnes of butter at a time. If the bakery is making large quantities of butter shortbread to order that increases the requirements. She said it was too expensive for the bakery to buy butter directly from dairy companies in New Zealand, despite being located in the centre of one of the country's biggest dairy producing regions. Kaye's instead uses an Australian broker to buy all its butter wholesale which Penniall described as "crazy". "I work with a company out of Australia. It seems crazy but it's too hard to buy off New Zealand butter companies, you need to be buying more than 10 tonnes to get a reasonable price," Penniall said. "I'll get supplied either Australian or New Zealand butter but out of an Australian broker." Penniall preferred to support New Zealand farmers but when Australian butter cost less, that's what she used. "There's no difference from New Zealand and Australian butter from a manufacturing perspective, the texture, the taste, the performance, it's all good." In a quest to lower its ingredient costs, Kaye's recently put butter from America on the table in a trial. "We were offered butter out of America. We checked the specs and it was really a lot cheaper like $3 a kilo. But it turned out the water content was actually a lot higher which would have been a disaster for us in manufacturing," Penniall said. And while others might swap out margarine for butter, customers buy Kaye's biscuits for their buttery quality. The company is now grappling with price rises for all its key ingredients which will need to be passed on soon. "We do struggle with the cost of butter," Penniall said. "Go back to 2022, only three years ago we were paying around $11 per kilo, and now we're paying $14 if not $15 dollars a kilo," she said. "We do thousands and thousands of butter shortbreads for our brand and for other brands and it makes it expensive because the customer wants the quality." She doesn't see the cost of butter coming down anytime soon. "I think it's the new way of that particular dairy product," she said. At last night's global dairy trade auction the price of butter fell 1.5 percent to US$7821 dollars a tonne, after hitting a record high of US$7992 dollars at the previous auction earlier this month. The strength of world prices means dairy farmers are poised to receive record payouts of at least 10 dollars per kilo of milk solids. Stats NZ data shows butter prices have increased significantly over the past year, with prices up over 65 percent in the 12 months to April.
RNZ News
21-05-2025
- Business
- RNZ News
Southland bakery says butter too expensive to buy from NZ dairy companies
Family owned business Kaye's bakery in Invercargill makes belgian biscuits, afghans and slices sold in supermarkets and dairies. Photo: supplied Skyrocketing butter prices have forced a commercial bakery in the dairy heartland of Southland to scour the global market for cheaper alternatives. Kaye's Bakery in Invercargill sells belgian biscuits, afghans and other sweet treats in supermarkets and dairies nationwide, often using butter from Australia to make its products. Luella Penniall owns the family business started by her parents Lois and Evan in the 1970s. She orders in 10 tonnes of butter at a time. If the bakery is making large quantities of butter shortbread to order that increases the requirements. She said it was too expensive for the bakery to buy butter directly from dairy companies in New Zealand, despite being located in the centre of one of the country's biggest dairy producing regions. Kaye's instead uses an Australian broker to buy all its butter wholesale which Penniall described as "crazy". "I work with a company out of Australia. It seems crazy but it's too hard to buy off New Zealand butter companies, you need to be buying more than 10 tonnes to get a reasonable price," Penniall said. "I'll get supplied either Australian or New Zealand butter but out of an Australian broker." Kaye's commercial bakery owner Luella Penniall (centre) with her parents Lois & Evan Penniall who founded the Invercargill company in the 1970s. Photo: supplied Penniall preferred to support New Zealand farmers but when Australian butter cost less, that's what she used. "There's no difference from New Zealand and Australian butter from a manufacturing perspective, the texture, the taste, the performance, it's all good." In a quest to lower its ingredient costs, Kaye's recently put butter from America on the table in a trial. "We were offered butter out of America. We checked the specs and it was really a lot cheaper like $3 a kilo. But it turned out the water content was actually a lot higher which would have been a disaster for us in manufacturing," Penniall said. And while others might swap out margarine for butter, customers buy Kaye's biscuits for their buttery quality. The company is now grappling with price rises for all its key ingredients which will need to be passed on soon. "We do struggle with the cost of butter," Penniall said. "Go back to 2022, only three years ago we were paying around $11 per kilo, and now we're paying $14 if not $15 dollars a kilo," she said. "We do thousands and thousands of butter shortbreads for our brand and for other brands and it makes it expensive because the customer wants the quality." She doesn't see the cost of butter coming down anytime soon. "I think it's the new way of that particular dairy product," she said. At last night's global dairy trade auction the price of butter fell 1.5 percent to US$7821 dollars a tonne, after hitting a record high of US$7992 dollars at the previous auction earlier this month. The strength of world prices means dairy farmers are poised to receive record payouts of at least 10 dollars per kilo of milk solids. Stats NZ data shows butter prices have increased significantly over the past year, with prices up over 65 percent in the 12 months to April. Sign up for Ngā Pitopito Kōrero, a daily newsletter curated by our editors and delivered straight to your inbox every weekday.
