Meat and dairy prices drive May food price inflation in New Zealand.

Food prices in New Zealand rose 4.4% in the 12 months to May 2025, driven by a 5.4% increase in meat, poultry, and fish prices, and a 5.2% rise in grocery food prices. The main contributors to the increase were higher prices for milk, butter, and cheese, with a 500g block of butter now nearly twice as expensive as in early 2024.

New Zealand's food prices have surged to their highest level in over a year, with annual food inflation accelerating to 4.4% in May 2025. This increase is primarily driven by a 5.4% rise in meat, poultry, and fish prices, and a 5.2% increase in grocery food prices [1].

The main contributors to the price hikes were higher costs for milk, butter, and cheese. For instance, a 500g block of butter is now nearly twice as expensive as it was in early 2024. Meat prices, particularly beef steak and beef mince, also saw significant increases, rising by 18.6% and 13.0% respectively [2].

This sustained inflation in food prices may place further pressure on household budgets, prompting policymakers to closely monitor the situation. The Reserve Bank of New Zealand (RBNZ) has signaled a data-driven approach to its monetary policy, with rate cuts near the end. The rising costs for essential staples could influence future interest rate decisions [1].

References:
[1] https://tradingeconomics.com/new-zealand/food-inflation
[2] https://www.tradingview.com/news/te_news:463367:0-new-zealand-food-inflation-hits-6-month-high/