‘There could be $1.50 a kilo difference’: This Aussie staple is cheaper for Kiwis than their own
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Butter prices in New Zealand have surged dramatically, sparking challenges for local businesses and shoppers alike.
What’s behind this sudden and steep rise in cost is a complex mix of factors both at home and abroad.
The ripple effects are being felt across bakeries and supermarkets, revealing a surprising global influence on everyday staples.
A surge in butter prices in New Zealand has forced one popular bakery to import its butter from Australia to manage costs.
Kaye’s Bakery owner Luella Penniall revealed to Yahoo News that she preferred buying local butter but had been forced to look across the Tasman due to soaring prices.
‘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.
The bakery’s contracts with retailers prevented sudden price increases, meaning continuing to use only local butter at higher prices would cause significant financial strain.
‘I’m a New Zealand manufacturer and I don’t want my products to become unaffordable,’ Luella added, mindful of the rising cost of living for Kiwi shoppers.
At major supermarkets such as Woolworths, PAKnSAVE and New World, New Zealand consumers were also feeling the pinch.
Westgold 400-gram butter packs sold at Woolworths in New Zealand for NZ$9.95, whereas the same product cost just $6.50 in Australia.
Similarly, 250-gram packs of Mainland butter were priced at $8.90 in New Zealand compared to $6.50 across the Tasman.
An international supply chain expert explained the high prices were partly driven by strong overseas demand for New Zealand butter, which was considered a premium product.
‘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 said.
Global factors also played a role, including New Zealand’s weaker dollar due to recession fears, a slowing Chinese economy and tariff threats from the US, making Kiwi butter more affordable to foreign buyers with stronger currencies.
Extreme weather and crop failures in the northern hemisphere created shortages, reducing competition and allowing New Zealand butter to command a premium price.
Domestically, New Zealand farmers faced drought pressures that increased the costs of raising livestock.
Purchasing and transporting supplementary feed raised expenses, and cows eating feed rather than grass altered milk fat content, affecting pricing.
‘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.
Australians were also paying more for butter due to contracts locking producers into large overseas supply deals.
This phenomenon was not limited to butter—fresh fruit and vegetables in New Zealand supermarkets often came from America, despite local produce being in season.
‘Even if they wanted to sell locally at a higher price, they’ve already been lured in by big contracts,’ Leaney said.
He compared the situation to Australia’s natural gas market, where large export contracts meant gas was sent overseas, then imported back at a higher domestic cost.
Leaney predicted butter price increases would be temporary and expected market forces to eventually bring stability.
He drew a parallel with Australia’s egg market, where avian influenza outbreaks caused shortages and price hikes that have since levelled off but are unlikely to fall dramatically again without shifts in economic conditions.
‘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,’ he said.
In a previous story, we explored how savvy Aussies are cutting down their grocery bills this year.
These money-saving tips are helping many households stretch their budgets further.
Check it out to see if you’re missing out on these clever strategies.
With butter prices climbing and local shelves offering less bang for your buck, would you consider buying imported products to save money? Let us know your thoughts in the comments.
What’s behind this sudden and steep rise in cost is a complex mix of factors both at home and abroad.
The ripple effects are being felt across bakeries and supermarkets, revealing a surprising global influence on everyday staples.
A surge in butter prices in New Zealand has forced one popular bakery to import its butter from Australia to manage costs.
Kaye’s Bakery owner Luella Penniall revealed to Yahoo News that she preferred buying local butter but had been forced to look across the Tasman due to soaring prices.
‘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.
Kiwi bakery imports butter to cut costs. Image source: Michael Dahlstrom
The bakery’s contracts with retailers prevented sudden price increases, meaning continuing to use only local butter at higher prices would cause significant financial strain.
‘I’m a New Zealand manufacturer and I don’t want my products to become unaffordable,’ Luella added, mindful of the rising cost of living for Kiwi shoppers.
At major supermarkets such as Woolworths, PAKnSAVE and New World, New Zealand consumers were also feeling the pinch.
Westgold 400-gram butter packs sold at Woolworths in New Zealand for NZ$9.95, whereas the same product cost just $6.50 in Australia.
Similarly, 250-gram packs of Mainland butter were priced at $8.90 in New Zealand compared to $6.50 across the Tasman.
An international supply chain expert explained the high prices were partly driven by strong overseas demand for New Zealand butter, which was considered a premium product.
‘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 said.
Global factors also played a role, including New Zealand’s weaker dollar due to recession fears, a slowing Chinese economy and tariff threats from the US, making Kiwi butter more affordable to foreign buyers with stronger currencies.
Extreme weather and crop failures in the northern hemisphere created shortages, reducing competition and allowing New Zealand butter to command a premium price.
Domestically, New Zealand farmers faced drought pressures that increased the costs of raising livestock.
Purchasing and transporting supplementary feed raised expenses, and cows eating feed rather than grass altered milk fat content, affecting pricing.
‘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.
Australians were also paying more for butter due to contracts locking producers into large overseas supply deals.
This phenomenon was not limited to butter—fresh fruit and vegetables in New Zealand supermarkets often came from America, despite local produce being in season.
‘Even if they wanted to sell locally at a higher price, they’ve already been lured in by big contracts,’ Leaney said.
He compared the situation to Australia’s natural gas market, where large export contracts meant gas was sent overseas, then imported back at a higher domestic cost.
Leaney predicted butter price increases would be temporary and expected market forces to eventually bring stability.
He drew a parallel with Australia’s egg market, where avian influenza outbreaks caused shortages and price hikes that have since levelled off but are unlikely to fall dramatically again without shifts in economic conditions.
‘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,’ he said.
These money-saving tips are helping many households stretch their budgets further.
Check it out to see if you’re missing out on these clever strategies.
With butter prices climbing and local shelves offering less bang for your buck, would you consider buying imported products to save money? Let us know your thoughts in the comments.
