In 2023 (the year of the last survey) Otago researchers reported that feeding a family of four (children 10 and 4) would cost $264, $343 and $412 on basic (carrots, oats and drumsticks), moderate (mushrooms, nutrigrain and thighs) and liberal (avocado, muesli and chicken breast) diets in Auckland, in comparison with $278, $362 and $434 in Wellington.<\/p>\n
The calculations assume that the families have basic food preparation and cooking skills, as well as access to a large supermarket and cooking facilities to prepare meals. <\/p>\n
Choice of food type (the calculations are not based on increasing quantity) makes a big difference to the wallet.<\/p>\n
In the Stats NZ data, the reality of choices appears in the food and CPI basket. <\/p>\n
In 2020, the food basket was adjusted to increase the weighting on restaurant meals and ready-to-eat food to 27.2%; in 2014, the category was 22% of expenditure. <\/p>\n
Last year, the basket was updated to include meal kits and remove celery<\/a>.<\/p>\n Expectations have changed, and a new norm has appeared, but for those on the land, it does feel like a beat-up when every month, Stats NZ data are greeted with \u201cfood prices up again\u201d.<\/p>\n Questions then emerge on who is taking advantage of the Kiwi battler?<\/p>\n Farmers, supermarkets and banks are the usual suspects.<\/p>\n Various investigations have been done over the years along the food chain, including Commerce Commission reports into supermarket and bank behaviour. <\/p>\n The United States has the most comprehensive set of analyses, dividing a dollar spent by a consumer into the different beneficiaries in different ways.<\/p>\n The first is simply the amount of the supermarket dollar that, on average, reaches the farmer and grower.<\/p>\n The answer is just over 9%<\/a>. <\/p>\n The people who actually till the soil receive 9.1c on average. <\/p>\n The processors (which, for most meat and dairy producers, are vital in turning the \u2018raw\u2019 product into something that customers want to buy) receive 13.2%. <\/p>\n Retail trade, the supermarkets and other outlets, receive 14.7%. <\/p>\n Food services receive the biggest proportion (31.5%, almost three-quarters of which is salary and benefits), and the rest goes to services like advertising, insurance and power.<\/p>\n Which part could we do without?<\/p>\n Australian analysis<\/a> has shown that in 2023, Woolworths and Coles supermarkets made 6.0% and 4.8% profit margins on total revenue, respectively. <\/p>\n In New Zealand, an increase in the number of providers for the mere 5.34 million people could result in increased prices<\/a>.<\/p>\n In contrast, it might be that the banks are being a trifle over-cautious<\/a> about protecting survival and keeping interest rates higher than strictly required.<\/p>\n In all these calculations, a small change at the bottom \u2013 such as the minimum wage \u2013 has a compounding effect. <\/p>\n A percentage margin is made at every step to cover costs and risks. <\/p>\n At each step, the actual figure increases.<\/p>\n The result can be record profits \u2013 or an unviable business.<\/p>\n Stock turn also makes a difference. <\/p>\n Farms have tended to become larger over the years for this reason. <\/p>\n The margin on a kilogram of milk solids or carton of apples won\u2019t keep the farming family in food, but adds scale, and economies start becoming viable. <\/p>\n Small businesses tend to fold into bigger ones for this reason.<\/p>\nDr Jacqueline Rowarth, Adjunct Professor, Lincoln University, is a farmer-elected director of DairyNZ and Ravensdown. She is also a member of the Scientific Council of the World Farmers\u2019 Organisation.<\/p>\n