Brad Olsen: Infometrics Principal Economist discusses the ever-rising cost of food

Stats NZ says food inflation was back up five-percent for the year to July.

The heftiest increases include butter rising 42-percent, cheese 29, and produce climbing more than seven.

Infometrics Principal Economist Brad Olsen says other essentials like milk, steak, and mince are also going up.

Olsen says food price inflation probably won't impact next week's Reserve Bank announcement, but it is uncomfortable for households. 

LISTEN ABOVE

See omnystudio.com/listener for privacy information.

Episode Transcript

Speaker 1 (00:00):
The cost of living crisis appears to continue to scare
kiwi's off. New data shows food prices are up five
percent in the year to July. Net migration for the
month is down eighty percent on last year. We're getting
very close to a new record high of kiwis leaving
the country. Brad Olson is a principal economist at Informetrics
and with US. Now, hey, Brad, good evening, what's driving
the food price up?

Speaker 2 (00:21):
Well, we're seeing that the same dairy costs that we've
been focused on the last couple of months are still
a key part of that discussion. Now that's a little
bit of an annual comparison thing. Of course, we've talked
a lot about butter in recent times. Interestingly, in July,
the price of butter, the cheapest butter that the stats
in Z investigators could find, was broadly the same as

(00:42):
it was last month, so a lot of the big
increases having come through not seeing quite as much further.
But you're seeing other costs likes of milk now that's
up considerably of course as well, but also the likes
of meat. You're looking at steak and mints that are
both seeing higher in July. And that's consistent with what
we saw in the grocery supply cost index when we

(01:05):
looked at input costs. Is that those higher meat prices
that we're getting overseas good news for exporders, of course,
means that some of our domestic prices are heading up
to So you're right now seeing those food price inflation
figures up to five percent. Probably won't change the dial
when it comes to the Reserve Bank meeting next week,
but of course very uncomfortable for households who are having

(01:26):
to pay more for the essentials.

Speaker 1 (01:28):
I mean, common sense would dictate this as part of
the reason why Kiwis are leaving.

Speaker 2 (01:31):
Right, I think that partly, But I think we've also
got to be clear that some of these increases you're
seeing overseas as well, there's still high prices for a
number of products. I mean you look at some areas
like the UK where their inflation has started to reaccelerate
like our, So it's part of the story. I think though,
what's interesting looking at those migration numbers that you've highlighted

(01:54):
is that you've still got the sort of real divide. Yes,
there's a very large number of New Zealanders that are leaving,
but there's also quite a large number of people that
have still come into the country, at least relative to
sort of more normal times before the pandemic. So we
do have I think, you know, it's not a one
way door policy at the moment, Heather. It's very much
sort of two doors at one exit, one enter, but

(02:16):
quite a lot of people going through both.

Speaker 1 (02:18):
Yeah, Hey, Brad, thank you as always, Brad Olson, Informetric's
principal economist. For more from Heather Duplessy Alan Drive, listen
live to news talks that'd be from four pm weekdays,
or follow the podcast on iHeartRadio.