Food prices fall in February, steaks down 17pc

Food prices fell 1.3pc in February, said Statistics NZ. Photo / The Listener

New Zealand food prices fell by 1.3 per cent in February on the back of falls in fruit and vegetable costs, as well as lowered meat, poultry and fish prices.

Additionally, Statistics New Zealand's food price index measured a February year on year increase of 0.7 per cent, the lowest annual increase since a 0.4 per cent gain for the year to April 2005. However, over a two-year timeframe, food prices are 9.6 per cent higher.

UBS New Zealand economist Robin Clements said that solely looking at monthly food price movements can be misleading, as factors such as weather and sale specials can add a strong degree of volatility to their costs.

"Food prices jump around a lot, and you're far better to look at the averages across a few months," he said. As a case in point, February's food price decline followed a 2.1 per cent increase in January and a 0.3 per cent fall in December 2009.

Four out of five subgroups recorded by Statistics NZ recorded lower prices.

Fruit and vegetables dropped 3.5 per cent, meat, poultry and fish fell 2.4 per cent, grocery food was down 0.8 per cent and non-alcoholic beverages declined 1.9 per cent. Restaurant meals and ready-to-eat food prices were unchanged.

Individual items displaying the most significant falls in February were porterhouse/sirloin steak with a 17.6 per cent decline as extensive discounting saw its price drop to a level last seen in August 2007. Apples' 26.6 per cent price drop reflects a typical fall as the new season's crop becomes widely available.

Minced beef on the other hand rose 5.2 per cent as many special prices were removed. Across the February year, lamb chops have increased 20.7 per cent and sausages have risen 13.7 per cent.

Other upward month of February contributions came from tomatoes rising 12.2 per cent and strawberries increasing by 36.3 per cent.

For the year to February 2010, fruit and vegetable prices have decreased 1.9 per cent, with falls being recorded for the past seven months. The most significant downward contribution across the year has come from 20.1 per cent lower potato prices and kiwifruit falling by 31.1 per cent.