New Zealand: How food prices affect and how much farmers produce
New Zealand
Published Aug 10, 2021
Tridge summary
ANALYSIS: In principle, if prices for a particular food are high, farmers will produce more of it, right?
Original content
It might seem like a straightforward equation, but it’s not normally as simple as that. Food prices are a hot topic in the aftermath of the Commerce Commission’s supermarket report, which identified significant problems in the supermarket industry. It said shoppers are paying high prices by international standards, and supermarkets are making high profits. But the high cost of food doesn’t generally benefit the farmer so much as the supermarket. Horticultural industry bodies say what growers are paid for their produce is dictated by the supermarkets. In the case of summer fruit, it all comes on the market in a three-month period. Perishable products selling to a duopoly, means all the power and pricing is in the hands of the supermarket companies. Vegetable growers, who mainly supply the domestic market, say they get better prices from independent retailers than supermarkets, and also shoulder the risk of damage to the produce during transportation. One grower who recently left ...
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