Dairy price rises to hit consumers

The price of cheese, milk and butter on supermarket shelves is about to rise again.

A 95 per cent increase in international wholemilk powder commodity prices since May has been good news for New Zealand's dairy farmers, but it impacts on consumer prices because manufacturers at home also have to pay more for the milk.

Fonterra said a one kilogram block of cheese sold in a competitive supermarket environment would rise to around $10 next month, from current prices of around $8.

Butter, which had been selling for around $1.99/kg in the past six months would go up to between $2.59 and $2.99, said Fonterra Brands managing director Peter McClure.

Milk was set to increase by 15c a litre next month, he said. Fonterra makes Anchor and Mainland products. Fonterra's main competitor in the supermarket chiller, Goodman Fielder, would not comment.

Foodstuffs NZ, operator of Pak `N' Save and New World supermarkets, said prices would not rise in its supermarkets until mid-January, although Fonterra's increases would come into effect on January 1.

Progressive Enterprises, which runs Countdown and Foodtown supermarkets, said it would also pass on the price increases from mid-January.

Fonterra said yoghurt and specialty cheese prices were unlikely to rise. Yoghurt uses skim milk powder, which has not seen the same international price volatility as wholemilk powder, and specialty cheeses did not reflect commodity price rises.

The Press