While cheap tomatoes may be good news for consumers, the benefits for growers are yet to be seen, Dr Jacqueline Rowarth says. Rowarth is an Adjunct Professor at Lincoln University, and a farmer-elected director of DairyNZ and Ravensdown.
At nzherald.co.nz, she gave an analysis on the New Zealand general produce situation.
Tomatoes were being sold for 9c/kg in Hastings in the second week of March, only to be beaten by 8c/kg in Auckland the following day. This caused quite a stir. The reason for the low prices was a glut caused by, at least in part, an inability to export to Australia and the Pacific Islands. Freight space shortages meant the cost of transport escalated and the tomatoes could not then be sold in the overseas markets at a price that would cover the costs.
Consumers benefitted from the surplus while supermarkets and growers took the economic hit from the shortage of freight space.
The primary producers of the world sell at wholesale prices but buy at retail. Every increase in minimum wage or change in environmental expectation results in more outlay from their business but mostly without a consequent increase in income.
In the last 20 years, food price to the consumer has increased by 55 per cent (a basket of goods costing $100 would now cost $155), but wages have increased by 89 per cent. The Food Price Index for February (released in March) reported that food prices increased by 1.2 per cent in the year ended February 2021.
Compared with February 2020, fruit and vegetable prices increased 5.1 per cent (wages and difficulties due to Covid-19 and crop management). Restaurant meals and ready-to-eat food prices increased 3.7 per cent, impacted by wages and property.