In New Zealand, a brick of butter is not so far off from a brick of gold.
Driving the news: Butter prices have climbed astronomically this year in New Zealand, leading many Kiwis to travel for hours to find cheaper options, wait in line to buy 30 bricks at Costco at lower rates, order butter from neighbouring Australia, or even churn it themselves.
- Per the most recent inflation data from Stats NZ, domestic butter prices in the country were 65.3% higher in April of this year compared to April 2024.
Why it’s happening: New Zealand is the world’s top dairy exporter, shipping out 95% of all the dairy it produces, good for a third of the world’s dairy trade. While this is a boon to the economy — accounting for 3.2% of the GDP last year — it’s a mixed bag for consumers.
- Dairy products in N.Z. are priced using an export parity model, meaning the prices local shoppers pay for a block of butter are the same it could fetch on the global market.
- And on that market, the combination of increased global demand for milk fats and butter shortages in some regions has created a price surge for Kiwi-made butter.
Why it matters: At a time when tariffs have renewed talks everywhere about self-sufficiency and reducing economic dependence on exporting, N.Z. finds itself in a position where global trade demands have raised domestic prices for a product it could supply in abundance.—QH