Families' health hit as food costs soar

Families are turning to less healthy food as the cost of basic items soars, a nutritionist says.

Food prices have risen almost 7 per cent in the year to May, the highest increase in almost seven years.

Bulk flour will rise $300 to reach $1000 a tonne soon, and this will flow into a wide range of products, including bread.

Winsome Parnell, associate professor of human nutrition at Otago University, said it was important that families kept buying milk and bread for their children, but for some on low or fixed incomes it was hard to cut back on anything else.

"For a long time there has been a group of people who can't afford to buy the food they need, and that must be growing as prices go up," she said. "It must be getting more difficult, and a lot more stressful."

It was a very tough call, with rising petrol and electricity prices also putting pressure on food budgets.

Shoppers hit by big increases in dairy product prices in the past year were "trading down" to budget or cut-price brands, Foodstuffs Wellington managing director Tony McNeill said. Cheese had risen about 60 per cent in that time.

One big supplier of goods using flour plans to increase its prices by about 10 per cent in August, Foodstuffs says.

"Typically, suppliers are coming in with 5 to 10 per cent increases in prices across the range. Everyone is getting hit everywhere," Mr McNeill said.

Poor harvests, high fuel costs and higher demand, especially from fast-growing Asian countries, are causing the cost increases. More land is also producing crops for biofuels, instead of food.

Mr McNeill said the increases were the worst in his 35 years in the business.

Prices would keep rising because of higher fuel prices, and a dropping Kiwi dollar, especially against the Australian currency.

"All major stuff, rice and flour, gets imported."

The Kiwi dollar has fallen from a peak of A88c in March to A79c.

Statistics New Zealand figures show food prices overall rose 1 per cent in May, mainly because of fruit and vegetable prices increasing by almost 4 per cent in a month.

Food specialists said a survey had shown about 10 per cent of families had poor nutrition.

The proportion could only be bigger now because of the price increases in basic healthy foods.

Those families were "food insecure", making them more prone to sickness.

And as people bought cheaper, fatty foods, levels of obesity would grow. Soft-drinks are significantly cheaper than milk, which sells for about $3.25 for two litres.

Fresh milk has risen 21 per cent in a year and butter 80 per cent.

But yoghurt prices fell 7 per cent in May, and cheddar cheese slipped 1 per cent to $10.67 a 1kg block. Butter eased 2 per cent to $3.66 for a block.

Fonterra said sales of cheese and butter had fallen slightly because of higher prices.