A “perfect storm” of factors has caused butter prices in New Zealand to soar by more than 65 percent over the past year, prompting one popular bakery to turn to imports from Australia to keep costs manageable.
Luella Penniall, owner of Kaye’s Bakery, shared that she has traditionally prioritized buying locally produced butter. However, the skyrocketing prices have made that increasingly difficult. Her broker now often recommends importing large quantities from Australia, where significant savings are possible.
“It’s craziness,” Penniall said. “There can be a $1.50 per kilo difference, and when you’re purchasing $50,000 or $100,000 worth at a time, that adds up to a lot.”
She explained that existing contracts with retailers prevent her from raising prices abruptly, meaning that continuing to use locally sourced butter at these inflated costs would impose a heavy financial burden. Moreover, increasing the prices of her popular cakes, slices, and biscuits would likely hurt Kiwi consumers, who are already feeling the strain of rising living costs.
This sharp increase in butter prices highlights ongoing challenges in New Zealand’s dairy sector and raises concerns about how small businesses will navigate these inflationary pressures while trying to keep products affordable for consumers.
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