John Stevenson: Fonterra Co-operative Council Chair on food prices increasing 5% in the 12 months to August

Food prices are continuing to rise, with a 5% increase in the year to August. 

Dairy continues to be the main driver, with the price of milk rising 16%, cheese 26%, and butter 32%.  

Meat, poultry, and fish followed behind, up 8.1% annually. 

Fonterra Co-operative Council Chair John Stevenson told Mike Hosking what they see is a pretty clear correlation between current prices and global markets. 

He says it’s a good time to be a farmer now but it may not always be the case, and you only have to go back to the 23/24 season in which the headline milk price was below the cost of production to see that. 

LISTEN ABOVE 

See omnystudio.com/listener for privacy information.

Episode Transcript

Speaker 1 (00:00):
Food Price Index one of those numbers where the reading
of it is the key as far as I can
work out, I mean annualized, yes it was five percent,
but the key to it I would have thought this
month on month it didn't actually move. Other words, the
ongoing issues seem to have stopped. Dairy continues that juggernaw act,
Milk up sixteen, cheese twenty six, butter thirty two, meat
and poultry and fish I hate. John Stevenson is the
Froontier Cooperative Council chair and as well as John, morning.

Speaker 2 (00:22):
To you, Good morning Mike.

Speaker 1 (00:24):
What's your understanding of the dairy story. What's your vibe
around this discussion we've been having in the country. Everyone
hates paying more for cheese and milk, But I mean,
do you think people finally understand why.

Speaker 2 (00:35):
I've had so and certainly understand, you know, having three
growing kids ourself, the cost to go in the said
market is really uncomfortable. But you know, hopefully the message
that it's a direct reflection of global markets is as
getting through. And just for a bit of context, you
a week nine percent plus of our product overseas, So

(00:55):
we feel those sides, but both the lows really sharply.

Speaker 1 (01:00):
Is there any actual issue when we come to look
at these numbers. Is there any issue for your guys
in your area with supermarkets, either supply, transportation, supply, chain
markups any Are there any issues around that or not?

Speaker 2 (01:12):
Not that we're aware of mic And look, you know,
we are further away from being farmers and representative sort
of farmers. But you know, what we see is a
pretty clear correlation between current prices in global markets. Is
a good news story obviously for US as farms strives
their profitability, but you know, also really good for our
regional economies as well.

Speaker 1 (01:32):
And I think we're great, see can't we. I mean
if you look at coffee, and you look at olive oil,
and you look at chocolate, I mean that these are
climatic things as opposed to market driven things. But nevertheless,
food goes up and food goes down, and that's just life,
isn't it.

Speaker 2 (01:45):
Yeah? Definitely, And from us ow to speak of as farmers,
you only have to go back to the twenty three
twenty four season where we hit a headline milk price
that was below the cost of production. So it's an
actual of the business and it's a good time to
be a farmer now may not always be.

Speaker 1 (02:00):
The case exactly. How bullishing you guys feeling at the moment?
I mean, are you beside yourself or not?

Speaker 2 (02:06):
Really? There's definitely a really strong sense of optimism. I
think we saw a couple of days ago the Rabobanks
survey come out showing the confidence and they're all set
their second highest in the last ten years. There's certainly
a lot of optimism out there at the moment. I
think farmers taking the opportunity to invest in a bit
of deeper payment, but also invest in some technology and

(02:27):
the food repairs and maintenance to get ourselves in a
good position for whatever the cycles may deliver in the future.

Speaker 1 (02:33):
Great stuff, John, appreciate your times, John Stevenson, who's the
Fonterra Cooperative Council. Just to run you through a couple
of the numbers, keep you for it. For example, down
nine point three percent. See that stuff doesn't make the headline,
does it? We want go on up five percent? I mean,
no one likes paying more. I fully get it, but
you got to understand the numbers. Restaurant meals ready to
eat food up two point four. Non alcoholic beverages that's

(02:54):
fuzzy crap. Don't buy it three point nine percent up,
don't buy it. Non food are rent price increase two
point one. That's pretty reasonable. Cigarettes and tobacco up four
point eight. Petrol prices down two point four. Domestic air
transport down eight point six, international though up eight point three.
Electricity prices and this is where the real scandal is.
This is the stuff. Forget your butter. This is the

(03:15):
stuff we need to be focusing on rates, insurance and electricity.
Electricity up eleven point four percent. Ask yourself, why supply
and demand? It's the old story. For more from the
Mic Asking Breakfast, listen live to News Talk Set B
from six am weekdays, or follow the podcast on iHeartRadio