Dear reader,
This article is different from my usual writing on faith and spirituality. I’m making it freely available because it deals with a very public nationwide issue that needs a lot more thought and action. Next week I’ll be back to my usual writing with something about how we understand a particular word in the Lord’s Prayer. Ironically, in light of this article, it relates to the bread.
I feel a compulsion to expound on a political and economic issue that gets me worked up every time I think about it. The price of butter in Aotearoa New Zealand.
It’s not simply about the price of butter. It’s about the price of food in our nation, the problem of food scarcity for too many families, and the PR spin that’s supposed to make us cheer and celebrate when food prices go up. It’s ‘trickle-down’ rubbish.
Financially my family is doing ok. We’re not struggling at all. We live in a very nice home and we eat well. I’m very privileged. That said, even for us red meat is now a treat. we still have mince from time to time, and we eat beef heart, but actual cuts of red meat (steaks and roasts etc)… that’s very rare for us. I recently got some blade steak to slow cook because I was craving that hearty winter meal vibe, and it felt like something really special. Blade steak as a treat! At the time of writing it’s $22.99 per kg at Pak’nSave.1
We do eat good amounts of chicken, though that also hasn’t been immune to recent price increases.
Chuck ($27.99kg at Pak’nSave), blade ($22.99), cheeks ($21.99), gravy beef ($27.99), bolar roast ($22.99), skirt ($26.99), tail ($25.99), lamb shanks ($27.99), - these used to be cheap and accessible because they needed some work to turn them into something palatable - usually slow cooking. They aren’t the prime cuts. Beef sirloin will now cost you $38.99kg, and beef eye fillet will set you back $65.49kg. Incidentally, tripe is about $15 per kg.
Way back in a bygone era some people would feed those ‘cheaper’ cuts to their animals. Those were the cuts that we would be eating in the single parent, DPB dependent household that I grew up in. We’re a nation that makes meat in abundance, so it made sense.
Butter, milk, cream - any dairy products. Again, we make this in abundance so once upon a time they were simple staples of any New Zealand household up and down the socio-economic ladder. Incidentally, in the kitchen of Masterchef Australia (my wife and I are fans of the show) these are referred to as their staples, alongside flour etc.
We’re a nation of just over 5 million people that produces enough food to feed around 40 million people. We export 95% of the dairy we produce. Around 87% of our beef is exported. Lamb and mutton? We consume 6% of what we make. 10% of our Kiwifruit is consumed here. Figures around seafood are sketchy but it’s likely we consume about 10%. Onions - we eat 15%. Apples - 14%. Two products where we consume more of what we produce than we export are honey and water.2
I celebrate our export market. That New Zealand produce does so well on the international stage is magnificent, and our economy would be crippled without it. Our food producers are hugely important.
Our prices here are not adjusted for the domestic market. Whatever the international price is, that’s what we pay - though, curiously, there are regular reports about New Zealand produce seen being sold in overseas supermarkets for cheaper than here… and because we export our best stuff, that product being sold for cheaper is better quality than what we usually buy here.
I hear Australia has a similar issue with the food they produce and export.
I was in a supermarket the other day. I took a quick look at the butter. We never buy it now. A block of Mainland butter was over $10. That’s ridiculous.
There will be those who point to slightly cheaper butter options, or talk about meats we can access for cheaper - especially now that we’re a nation of chicken eaters. Some will say to go vegan. Whilst that’s a great choice for some, it comes with a raft of required education around meeting nutritional needs in a different way.
Then are the calls to stop buying highly processed foods. Sure there are tweaks that can be made, and there are ways to eat healthily on a tight budget, but that doesn’t change the fact that we’re a nation with a problem around household food security while we produce good, high quality whole food in abundance.
Both the government and Fonterra have been challenged on the price of dairy. The supermarkets are also being confronted about their pricing practices. They all wash their hands of the situation as Pilate did when he sentenced Jesus to death.
Butter is only one product, and yes, there are cheaper substitutes, but the focus on butter is indicative of the wider problem of food scarcity while we feed around 35 million people overseas… or more since we’re not feeding our own 5 million properly.
When the challenge gets raised and the questions get asked, the PR spin kicks in.
Let them eat cake.
We’re told it’s actually a great thing.
We were told this after the Finance Minister had the Fonterra boss in her office to do some explaining. Ah, the theatrics that lead to no change.
It appears we should be celebrating.
Government ministers have told us it’s good news, and the CEO of Fonterra has told us it’s good news, so it must be good news.
Celebrate, peasants!
That line about it being good news is partially true. Since we export so much of what we produce, higher international prices means a better return for our agricultural sector. The last thing we need is a struggling agricultural industry. The idea is that the returns for our agricultural sector will then flow into the rest of the economy with more jobs produced, and the sector spending and investing its wealth in other parts of the economy. trickle-down. I get it, and again, it’s partially true.
We’re told by government ministers and the CEO of Fonterra that they feel it too since they buy butter. If they really do feel it they must be terrible budgeters with their high salaries. If I were being paid $6 million per year I’d be able to fill my family’s trolly (and the trolly of some others) at high end supermarkets without even blinking. Heck, I’d be able to get butter flecked with gold and not even break a sweat at the price!
Until that flow-on that they talk up happens, the advice gets thrown around on how to eat on a budget. To rub salt in the wound it’s often coming from people who probably don’t really need to look at the food prices when they’re doing their shopping. Rather than being told to eat cake, people are told to eat lentils, rice, beans, and porridge. These things are great, and they’re good staples that, in the spectrum of food prices, are cheap. I love using them. Generations have survived on them. They’re hugely popular in various cultures because they are extremely worthwhile in any diet, but it’s still condescending and dismissive baloney when we produce so much other quality produce.3 It also doesn’t take into account that those staples aren’t a whole diet, and that we import most of them.4
Or grow your own veges. Never mind the time, physical space, and expertise needed, let alone the actual financial cost.
A lot of this sort of advice is good for people in middle to low middle income families facing a time where the food budget needs to be tightened, so they’re looking for ways to make meals go further for cheaper, but it does next to nothing for those who really do need the assistance provided by food charities.
Here’s the problem we’ve got, and why the good news story is only partially true. We currently have a tale of two economies in this moment that we find ourselves in as a nation.5 The agricultural sector (and please know that my beef is not with the food producers themselves. Our economy needs our farmers. Many of them do a great job and have been through some tough times) is reaping the benefit of high export prices. But that money, understandably, is being used to pay down debt that has been accrued over previous years of lean times. It’s not flowing into the wider economy, and it may not for some time.
In the meantime, wages in the wider economy have been stagnant for a number of years though food and energy prices have risen. Alongside that, in real terms, the social welfare we provide for those who struggle has gone backwards as inflation has bit and the purchasing power of the dollar has decreased because of it.
Council rates up (and set to continue rising significantly in many parts of the country). Rents up. Food prices up. Energy costs (power and petrol) up… household incomes stagnant if not going backwards, particularly as the unemployment rate climbs. It’s a recipe for disaster.
Solving the problem is complex but ‘what I would tell you is’ we can’t keep mindlessly doing roughly the same thing and expect a better result. We keep tweaking our way left and right through economic booms and busts, and do next to nothing to properly cushion the blow on something as basic and necessary as food when the busts happen. The basics need to be secured with little disruption when the busts happen.
Violent revolutions happen when those struggling stop swallowing the spin.
Those in power keep skirting questions about why New Zealanders pay so much for food produced here. It’s time we really considered how we could implement a two-tier pricing system so that our population can properly access the food our nation produces. Food scarcity needs to be dealt with here. We have a deep injustice in play. Solving it would have so many social benefits, including within the education and health sectors that we spend so much on. How would the cost of those shift if we solved the food problem? Our diet plays a big part in both.
And trust me, this isn’t me simply having a go at the current government. Both sides of the house seem bereft of any decent solutions. And it’s not just a government problem. When our model of business is only concerned about the maximising of profit for shareholders,6 with no deeper social considerations, the system will ultimately act selfishly.
There may be some who will be quick to look at me, notice I’m a religious minister, and point to churches needing to do more. Yes, the challenge should always be on for churches to step in and up, but financial assistance, food parcels, budgeting services, and social housing etc that the charitable sector (of which churches are significant part) provide can only go so far. They’re a band-aid over systemic issues. It enables the powerbrokers to kick the problem down the road.
Food insecurity for far too many families in Aotearoa New Zealand is a systemic issue, and the powerbrokers who do not have to live through the issue in their own home seem very reluctant to do anything real to solve the problem… more charity isn’t the solution.
There are many responses that can flow about why we shouldn’t or can’t do a two-tier system for export and local prices. Obviously the cost of cheaper prices has to be met and swallowed somehow,7 but with most products we’re only talking about a small portion of what’s produced while most of it continues to be exported.
If we don’t do something meaningful, we’re knocking on the door of some deeper problematic social outcomes that the powerbrokers can currently shield themselves from… but they won’t be able to do it forever. At the risk of sounding alarmist, I’d like us to avoid a violent revolution - and let’s not dull ourselves into thinking it could never happen here. It’s just a matter of where the tipping point is; that point when people feel truly helpless, like they’ve got nothing to lose and have no other way out.
The only other way to solve the problem rather than getting prices of food and energy down is to see household incomes increased to match the price inflations.
Related to that, there’s a lot of conversation about improving our nation’s productivity. That’s a necessary conversation but it does little to feed hungry people while we keep pontificating about it.
The last few years have had us in a tough economic time with wage stagnation, inflation, increased unemployment etc. It’s not all accidental. In its most simplistic terms, the idea behind the Reserve Bank (RB) raising the official cash rate (and therefore, interest rates) to tame inflation is to deliberately cause a mismatch between incomes and prices for a while in order to slow down spending by making household and business budgets tighter. That can only be tolerated for so long before wages need to catch back up. The RB is now in a cycle of cutting the OCR to try and stimulate things again. It’s sputtering8 and there are signs of life, but when butter has gone up 60% in a year, we’re a long way from the sort of wage increases needed to lessen the impact.
Something has to change. We need creative minds to find solutions.
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I only mention Pak’nSave because it’s where we usually get our meat from.
RNZ - Who’s Eating New Zealand? This was a 2021 article, but I do not imagine the figures are much different now.
And the advice usually doesn’t consider all the complex factors of poverty, and the reasons behind the food being consumed in households that are deeply struggling.
A quick look at the beans in my pantry (we buy them in cans rather than dried. We get the cheapest cans at the supermarket) reveals that one lot were packed in Italy from imported ingredients. Another lot were packed in Italy from beans imported from the US. The Moong Dal I have says it was packed in New Zealand but doesn’t say where it came from. My big bag of Basmati rice says its a product of India.
I’m very much all for people profiting in business - business profits are a very good thing, but unless there are other considerations of social benefit alongside that, we risk leaving a whole lot of people behind while the trickle-down fantasy gets talked up.
Even cutting GST as is often suggested, which is only 15% of the cost - butter would go from $10 to $8.70… still high - comes at a cost since that’s lost revenue that would normally be used elsewhere. That said, how much is being spent as meagre assistance to help people access food?… money that wouldn’t need to be spent if people could genuinely access quality food cheaply.
Housing is a big part of this mix. See comments reported by Bernard Hickey over at The Kākā,
When we used the food bank for the first time I felt deep shame. Like I hadn’t budgeted well enough, perhaps I’d been too generous to my kids and now I couldn’t buy the food we needed. Now that it’s a more regular occurrence I’m deeply concerned that if we are struggling on one fairly decent income…..how on earth are those with less coping?
With an election just a year away, I'll be looking for tax policy that is demonstratably fair and allows for a whole-of-society response to this problem. It seems highly likely that there will be a strong mood for change and that the incumbents will be unable to convince the public they can deliver that change. Therefore the pressure is on the parties presently in opposition to be bold, compassionate and fair - an insipid 'left' will not cut it.