As well as households, baking businesses have been severely affected by the price rises of butter. (File photo) Photo: Margaret Jaszowska for Unsplash
The high retail price of butter in New Zealand is hurting both families and the baking industry.
The price of a block of butter is now 120 percent higher than it was a decade ago, Stats NZ said. In the year to June it was up 46.5 percent to $8.60 for a 500g block.
Finance Minister Nicola Willis met with Fonterra chief executive Miles Hurrell on Tuesday night to discuss the situation, with Willis stating she would answer questions on the meeting later on Wednesday.
The meeting was trumpeted by Willis as a chance to ask questions about pricing behaviour - including asking why New Zealand butter was cheaper to buy in Australia than on our own shelves.
Heather Kalisch, a baking educator who runs classes for families across the country, told Morning Report, the rising prices of butter were making things really difficult for families.
"The thing about butter is it does so many thing in a recipe, so it's hard to make suggestions on alternatives without changing the recipe."
Kalisch said generally butter could be replaced with oil in a recipe for a cheaper alternative without impacting it too much but this would not work so well for things like cookies, scones or shortbread.
"I am recommending to families to use oil or margarine or Nuttelex, but nothing is quite the same as that butter.
"Butter provides the moisture and the richness and the flavour in a recipe. There are some things you can do to bump up the flavour in a recipe, like adding extra vanilla or salt or another flavour profile."
Kalisch said she was on a mission to get more families in the kitchen baking but the cost of ingredients was a huge part of it.
She said while the price of butter continued to increase it may not always be cheaper to bake items at home from scratch, but for items like carrot cake where oil could be substituted it would still work out cheaper than a cake from the supermarket.
The baking industry itself was hurting from more than just the steep rise in butter prices, Baking New Zealand president Bernie Sugrue said.
Sugrue said rising costs on just one product were not so bad but bakers were "being hit from all sides" with the prices of eggs and sugar also increasing.
Some bakers who can use butter alternatives will, Sugrue said, but many did not want to play with their recipes.
"It does make it quite difficult," he told Morning Report, "you can't cut it too much back or you lose your flavour profile."
While prices may not be quite as bad in Australia, Sugrue said he had recently been across the ditch to speak with big manufacturers and he believed it was "only slightly less" than what New Zealanders were paying.
Sugrue said the increased prices of butter would mean prices would be going up for consumers too.
Labour leader Chris Hipkins told Morning Report, he believed Willis meeting with Fonterra on Tuesday night was "just a performance" and he did not believe a solution to the prices increases had been found.
"I don't think they have a plan to lower the price of commodities in our supermarkets."
When pressed on what Labour would do in the same situation, Hipkins said Labour was not the one who promised the country to lower the price of butter before the last election.
"Nicola Willis and Christopher Luxon did that... There should be scrutiny... There's been a lot of hot talk on supermarkets but nothing has been done to fundamentally change that."
While prices of butter were high at the moment, Rabobank Dairy Analyst Michael Harvey, told Midday Report, it would not always be this way.
"The price of everything in the dairy industry has steadily increased. We had record high prices in June. Consumers everywhere and manufacturers are now dealing with higher prices hitting the shelves."
The reality was consumers everywhere were paying more for butter, Harvey said, but there was some capacity to bring it down.
"Dairy manufacturers could take a bit of a margin hit to bring down prices, but that will squeeze their businesses.
"I think over time the market will correct. More milk will flow into butter production... So while we have high prices at the moment it won't always be the case."
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