Butter costing too much bread

That large dollop of butter on your morning toast will come at a price.

The price of butter has skyrocketed, with a 500g block costing double what it was four months ago.

High overseas commodity prices are largely to blame for the big price hike.

In September, 500g of butter retailed for around $2.50, but increasing overseas demand for New Zealand butter has driven the local price as high as $4.99.

Prices for other dairy products have also increased and some shoppers are now switching to cheaper alternatives.

Hamilton retirees June and Douglas Cummins said they had stopped buying butter for the first time in 40 years.

"I only buy it now if I have to do some baking, which isn't often," Mrs Cummins said.

The couple had also stopped buying large blocks of cheese.

"Some of it's $13.99," Mrs Cummins said.

Te Rapa New World owner Chris Grace said customers had commented on the price rises. "It was quite a sizeable increase it's an increase pushed upon us by both dairy companies."

Mr Grace said his store still had butter on special at $3.99, down from a usual price of $4.99.

"We're sympathetic to the impact it has on people. It hasn't been initiated by us."

Hamilton Budget Advisory Trust manager Clare Nataira said a general food price increase had been noted by the organisation and the low and fixed-income earners it dealt with, particularly milk and cheese.

She urged people to shop around.

"It'll be a shame if those things (dairy products) get dropped from an already squeezed budget for people on fixed incomes.

"Everything's going up, and often it's the food that goes ... they've still got to pay the rent."

Food and Grocery Council chief executive Brenda Cutress said the price hikes had been predicted by her organisation late last year, and the issue of rising food prices, including dairy products, was also "making headlines" in the UK and US.