Summarised by Centrist
In a country that exports 98 percent of its dairy, New Zealanders are paying $8.60 for a 500g block of butter. That’s nearly double the price just 14 months ago, and three times what it cost in 2015.
Economists say the price hike is due to surging global demand and shrinking supply.
Butter prices on Fonterra’s Global Dairy Trade platform rose 74 percent between August 2023 and May 2025. Droughts, regulation, high energy costs, and even a bluetongue virus in Europe have all squeezed production. Appetites in Asia, the Middle East and North Africa continue to rise.
Finance Minister Nicola Willis met with Fonterra boss Miles Hurrell this week, but even she admitted the government has little control. Fonterra claims its margins are tight and the real markup happens at the checkout. “All roads lead back to supermarket competition,” Willis said, pointing the finger at retailers.
ACT leader David Seymour defended the high price, calling it a sign of economic strength. “They are undoubtedly painful for consumers,” economist Gareth Kiernan agreed, “but they mean that dairy farmers’ incomes are increasing, which will help drive New Zealand’s economic recovery.”
Consumer NZ wasn’t buying it. “When this is contrasted with an increasing number of people who are struggling to pay for the basics, we question at what cost?” a spokesperson said.
Relief is unlikely before late 2025. Prices may rise further in the short term, and even an 8 percent global correction would leave butter well above past levels. As Kiernan put it, “we have yet to see any dip in international prices.”
Read more over at The NZ Herald and Stuff
Image: rodeopix
