It's all about economics
OPINION: According to media reports, the eye-watering price of butter has prompted Finance Minister Nicola Willis to ask for a 'please explain' from her former employer Fonterra.
These increases were mainly the result of higher prices.
In March 2022, total goods exports rose $978 million (17%) from March 2021 to reach $6.7 billion.
Exports of dairy products (milk powder, butter, and cheese commodity group) led the rise, up $461 million (30%) to $2 billion in March 2022.
This rise was led by milk powder, up $180 million on a year earlier. The rise was price-led, as quantities exported fell 9.3 percent. Rises in butter (up $111 million), cheese (up $71 million), and milk and cream (up $56 million) were also price-led.
Compared with March 2021, unit price changes for dairy products included:
- Milk powder (up 33%)
- Cheese (up 27%)
- Butter (up 44%)
- Milk and cream (up 33%).
“The recent high prices for exported dairy products have pushed values higher in almost all months of the 2021/22 export season to date, despite a fall in the overall quantity exported this season,” says international trade statistics manager Alasdair Allen.
Exports of milk powder, butter, and cheese in the 2021/22 season to date (August–March) were 18 percent higher in value, but 6.7 percent lower in quantity than in 2020/21.
The total value exported in the season to date is higher than in the strong dairy export season of 2013/14 when international prices were also high.
Other contributors to the rise in exports were beef (up $101 million), unwrought aluminium (up $57 million), and casein (up $31 million). These increases were all price-led; average unit price changes for these commodities compared with March 2021 were:
- beef (up 39 percent)
- unwrought aluminium (up 70 percent)
- casein (up 46 percent).
Of New Zealand’s main export markets, the United States had the largest rise, up $225 million (39 percent) to $796 million. The rise was led by increases in lamb, mechanical machinery and equipment, and casein.
