Food Price Index: December 2009

Food prices in December 2009

Food prices fell 0.3 percent in December 2009, following decreases of 0.3 percent and 1.5 percent in November and October 2009, respectively. This is the fifth consecutive fall in the food price index (FPI), the first time this has happened since five consecutive monthly falls ending in December 1967.

In December 2009, lower prices were recorded for the meat, poultry, and fish subgroup (down 1.2 percent), grocery food subgroup (down 0.3 percent), non-alcoholic beverages subgroup (down 1.2 percent), and restaurant meals and ready-to-eat food subgroup (down 0.2 percent). Higher prices were recorded for the fruit and vegetables subgroup (up 1.8 percent).

The most significant individual downward contributions came from lower prices for nectarines (down 24.2 percent), corned beef (down 25.6 percent), and soft drinks (down 1.4 percent).

The most significant upward contributions came from higher prices for potatoes (up 21.7 percent), apples (up 17.6 percent), and minced beef (up 8.7 percent).

Distribution of item-level movements

The table below outlines the distribution of price movements in November 2009 and December 2009. The FPI has been partitioned into those national item-level indexes that increased, showed no change, or decreased.

• the percentage of expenditure weight of items that increased in price fell significantly, while the percentage of expenditure weight of items that decreased in price rose significantly.
• the weighted average price decrease fell, while the weighted average price increase rose.
• while the weighted average price decrease and increase were similar, the expenditure weight of items that decreased in price was greater than the expenditure weight of items that increased.

Annual movements

Food prices increased 0.9 percent in the year to December 2009, following increases of 0.9 percent and 2.0 percent in the years to November and October 2009, respectively.

Three of the food subgroups increased in the year to December 2009. The most significant upward contributions came from higher prices for non-alcoholic beverages (up 6.6 percent) and restaurant meals and ready-to-eat food (up 2.8 percent). The grocery food subgroup also rose (up 0.3 percent).

The food subgroups which decreased were fruit and vegetables (down 2.1 percent) and meat, poultry, and fish (down 0.9 percent).

The most significant upward contribution came from higher prices for soft drinks (up 9.5 percent), tomatoes (up 68.9 percent), and white sugar (up 34.4 percent).

The most significant downward contributions came from lower prices for apples (down 25.8 percent), chicken (down 8.5 percent), cheddar cheese (down 15.9 percent), and potatoes (down 14.7 percent).

While food prices have fallen 3.5 percent over the past five months and are 0.9 percent higher than a year earlier, they are 10.0 percent higher than two years earlier. This compares with an 11.4 percent increase in food prices from November 2007 to November 2009. Biennial increases in food prices have been decreasing from a high of 17.3 percent from June 2007 to June 2009.

Meat, poultry, and fish

Prices for the meat, poultry, and fish subgroup decreased 1.2 percent in December 2009, following an increase of 0.1 percent in November 2009 and a decrease of 3.2 percent in October 2009. Prices for meat, poultry, and fish have returned to levels last recorded in October 2008.

The most significant downward contributions to the December 2009 fall came from lower prices for corned beef (down 25.6 percent), chicken (down 2.1 percent), and fresh fish (down 3.9 percent). The most significant increase came from minced beef (up 8.7 percent), where prices were influenced by significant specialing in November 2009.

For the year to December 2009, meat, poultry, and fish prices decreased 0.9 percent. This is the first annual fall in this subgroup since prices fell 0.3 percent in the year to August 2004. Although meat, poultry, and fish prices are now 0.9 percent lower than a year earlier, they are 10.1 percent higher than two years earlier.

The most significant downward contributions to the annual fall came from lower prices for chicken (down 8.5 percent) and corned beef (down 29.9 percent). The large monthly and annual falls in the price of corned beef are partly due to significant specialing in the December 2009 month.

 

Fruit and vegetables

Prices for the fruit and vegetables subgroup increased 1.8 percent in December 2009, following decreases of 2.0 percent and 4.6 percent in November and October 2009, respectively. The increase in fruit and vegetable prices follows four consecutive monthly decreases, and prices are now 15.7 percent lower than their recent peak in July 2009.

The most significant upward contributions to the December 2009 rise came from higher prices for potatoes (up 21.7 percent), apples (up 17.6 percent), and bananas (up 4.2 percent). The most significant decreases came from nectarines (down 24.2 percent), cabbage (down 39.1 percent), and strawberries (down 28.3 percent). Nectarine prices usually fall in December months following sharp rises in November months, with the December 2009 price fall following the doubling of nectarine prices in November 2009.

For the year to December 2009, fruit and vegetable prices decreased 2.1 percent. Annual falls for fruit and vegetable prices have been recorded for the past five months. Fruit prices were down 7.9 percent and vegetable prices were up 2.6 percent for the year to December 2009.

The most significant downward contributions to the annual fall came from lower prices for apples (down 25.8 percent), potatoes (down 14.7 percent), and carrots (down 23.6 percent). The most significant increases came from tomatoes (up 68.9 percent) and lettuce (up 26.4 percent).

 

Other subgroups

Lower prices were recorded for the grocery food (down 0.3 percent), non-alcoholic beverages (down 1.2 percent), and restaurant meals and ready-to-eat food (down 0.2 percent) subgroups.

For the first time this decade, the grocery food subgroup decreased five months in a row. Grocery food prices have returned to about the same level recorded in April 2009.

Within these subgroups, the most significant downward contributions in December 2009 came from lower prices for cakes and biscuits (down 2.8 percent), soft drinks (down 1.4 percent), and yoghurt (down 3.4 percent). The most significant upward contributions came from higher prices for margarine (up 8.7 percent), coffee (up 5.1 percent), and white sugar (up 9.7 percent).

The most significant downward contributions for the year to December 2009 came from cheddar cheese (down 15.9 percent), fresh milk (down 3.8 percent), and butter (down 28.5 percent). The most significant upward contributions for the year to December 2009 were soft drinks (up 9.5 percent), white sugar (up 34.4 percent), and chocolate (up 5.4 percent).

For technical information contact:
Yvonne Fakahau or Daniel Griffiths
Wellington 04 931 4600
Email: info@stats.govt.nz

Next release ...

Food Price Index: January 2010 will be released on 11 February 2010.