Vege prices set to drop as yields improve
The cost of vegetables and leafy greens is set to come down as the summer months bring better growing conditions on farms, one grower says.
Leaderbrand chief executive Richard Burke said, as the weather improved, more volume of vegetables was being grown that could be sold at lower prices.
Leaderbrand grows broccoli, lettuce, sweetcorn, squash, and leafy greens that are used to make packaged salads.
Burke said there had been a lot of talk about food prices driving inflation, and fresh produce being a big part of that.
Food prices made the biggest jump in 14 years in October, up 10.1% year-on-year, Stats NZ data showed. Fruit and vegetables were up 17%.
Burke said warmer weather meant paddocks dried out faster, which was better for plant growth.
This in turn meant better yields that could be passed on to consumers at lower prices.
Over the next month Leaderbrand would sell produce at a lower price than it cost to grow it, he said, to try to drive customers to buy.
Fresh produce growers worked on an annual profit model and would sell produce for less than it cost to grow in some months and for more than it cost to grow in others, he said.
The price in supermarkets was determined by the amount of produce available and how much the public wanted the product, as opposed to a model where a cost to grow was worked out and a margin added on top of that, he said.
Large volumes of produce were cheaper to produce and meant farmers were more efficient. The cost to grow became less the more that was grown, Burke said.
Countdown produce manager Ryan McMullen said the summer meant more settled weather, which in turn meant better supplies of vegetables and leafy greens.
Countdown was passing these savings on to customers wherever it could, McMullen said.
This week it had bags of leafy greens starting from $3.50 and whole iceberg lettuces for $3.50 each, he said.
Last month the average price of 1kg of lettuce was $6.43, Stats NZ said, up from $5.39 a year earlier and $3.64 the year before that.
Some other popular fruit and vegetables would come into season in summer and customers should start to see good value on things like eggplants, corn, berries and stonefruit, he said.
Produce was very weatherdependent and nothing was guaranteed week to week, but Countdown spoke to growers every day to see how things were going and to get good prices for fresh produce, McMullen said.
A spokesperson from Foodstuffs said with the start of summer just 12 days away, crops were benefiting from the longer daylight hours and warmer weather.
Growers could expect larger and more varied supplies, which helped stabilise prices. This resulted in better value for customers, the spokesperson said.
There was always volatility in the produce market due to unforeseen circumstances, like weather, but a larger supply of berries, capsicums, cucumbers, lettuce, salad bags and tomatoes could be expected, the spokesperson said.