While the international Global Dairy Trade (GDT) prices for milk products have taken a minor turn for the worse, meat and in particular lamb are going from strength to strength.
Progressive/Countdown are now paying on the advertised schedule $9.00 per kg for lamb in the South Island with the North only a tad behind. It is no wonder there are starting to be a few squeals coming from consumers about the price they are having to pay.
The $9.00 translates into prices ranging at the supermarket (Countdown) from $19 per kg for shoulder chops up to $33 for lamb steaks. A leg of lamb is $21 per kg. Prime beef which is floating around the $6 per kg for farmers is getting up to $35 and beyond for Scotch fillet and prime mince at $18. Stewing steak is (still) at $9.00 but did look a bit gristly and so a long cook would be required.
Having a look on the Sainsbury website in the UK as perhaps a comparable export destination supermarket to Countdown, a leg of New Zealand lamb there is worth £11 per kg and their top value local beef is £33 (30 day matured). With the New Zealand dollar being worth £0.51 then the UK £ price can be doubled to get a rough comparison.
So, the leg of lamb is pretty comparable although the beef is through the roof in the UK. The UK prices make it understandable why at least lamb meat prices are high in New Zealand. If the UK are paying humongous prices for beef the presumably that is a reflection of the international prices.
But it does ask the question why farmers here are still only getting $6 per kg.
The high international prices are unfortunately cool comfort for those in the domestic market who are having to compete at these levels.
There are no doubt cheaper places to but meat than Countdown, a quick look at a couple of ‘direct purchase’ websites surprised me by actually being more expensive. Farmers are contributing to food banks via the “Meat the Need” charity. However, this is not putting red meat onto Kiwi’s plates. From where I sit there are no easy answers.
To provide more affordable meat someone in the chain has to take a haircut, the easy finger pointing goes to the retailers, notably supermarkets. However as can be seen their prices are not over the top when compared to UK prices and no doubt I could have found more expensive sites. Farmers are not making so much that they can trim their margins so then the focus goes to Government; could or should they consider subsidising staple foods.
In some ways they are, by providing WINZ top ups to lower income families et al to access more groceries. However, apart from more basic meat cuts WINZ top ups are not going to reach the mid to top end cuts.
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Interfering directly with food pricing is a dangerous path to go down. Argentina has some crude government controls restricting beef exports to provide cheaper domestic meat. This was/is in response to 60-70% increases in the price of food and a 50% annual inflation rate overall.
Needless to say, beef farmers are not happy there and their government plan to increase beef production from 3 million tonnes to 5 million, thereby being able to swamp the local market and presumably bring down prices, has no detail and farmers are highly sceptical.
Prior to the latest controls, about 70% of Argentina’s beef (5th largest beef producer worldwide) was/is going to China. The latest restrictions may provide more opportunity for New Zealand beef to fill some gaps.
Did anyone else notice irony of the gaff of Minister of Trade and Agriculture late last week? It happened on the same day that media were highlighting the 40th anniversary of the start of the 1981 Springbok tour - the tour where Muldoon was sticking to the principle of "sport and politics don’t mix", something we know has proved time and time again to be wrong, even if we may not agree with it.
What Minister O’Connor said is "This is a security issue. It's not a trade issue. We have no reason to believe that there should be any reaction".
Unfortunately, security and trade are certainly aligned and trade is a well-travelled ‘weapon’ to inflict pressure on other countries and often over security matters. A gaff at best, highly ironic on the Springbok tour anniversary. And who does he think he is kidding? China?
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Easier said than done though. How do you define a basic food item? The UK spent many millions litigating whether a jaffa cake is a cake(a luxury) or a biscuit(a staple). Repeat that across hundreds of edge cases and the whole thing may well be more hassle than its worth.
https://www.kerseys.co.uk/jaffa-cakes-cakes-biscuits/amp/
Btw, a jaffa cake goes soggy when stale and is therefore a biscuit.
I don't know how changes in tax regulation could make up for this 'she'll be right' attitude in shopping aisles.
Several studies have for years found that the average Kiwi is poor at shopping around for better deals; a market feature that emboldens retailers to price their items higher.
Kiwi's are poor shoppers primarily because they have no options. It is very much a rigged game in NZ.
Fuel, Groceries, Power, etc.... no real competition, collusion on price, ineffective consumer protection, the list goes on...
I mean - are you really "shopping around" because you went to Pak n Save instead of New World?
Maybe we could embrace modern shopping methods and go online. Oh wait, xyz.com wont deliver to NZ, or has NZ specific pricing because they know we are stuck as per the above.
The problems begin when the word 'unprocessed' means something else in the context of different food groups or items.
'Processes' that involve shelling nuts, washing vegetables, pasteurising milk, canning fruits in their own juice, etc. make it harder to define and monitor.
At the end of the day, you can also rest assured on the likes of Fonterra and other food lobbies to try and slip as many of their product offerings as possible through the cracks.
This is exactly the problem, it doesn’t need to be complicated. Raw form, so a shelled nut is still raw form, washed veges is raw form, fruit in juices is raw form. Sure there will be some gray areas like milk but we can at least make headway with the above mentioned rather than continually arguing semantics as we so often do.
Yeah, I think this is simply isn't as big a problem as people like to make out. Ok, so some people end up having to define things and have arguments about it. There's some extra cost involved in that, no doubt.
But meanwhile, everyone else will be saving 13.04% on basic food items compared to what they currently pay (assuming retailers properly pass on the GST savings).
Cynically, realistically, unfortunately you are exactly right. Same thing would happen if GST was removed from council rates, they would be right back to where they were in less than a year. What should happen is GST collected should be dedicated to its source and invested back into the relative industry. Bit like speed camera revenues going into road maintenance, which of course it doesn’t.
The thing is simple is really hard to get right. To make is simple you need to draft a term that is can be unilaterally interpreted and applied to each thing with no further input/discussion, and with regards to this topic, there are agendas galore who will all be fighting for their preferred interpretation.
So the grey area is essentially everything.
A plain apple may be raw form
But what about
An artificially ripened apple?
A frozen apple?
An apple in individual wrapping?
A peeled apple in a bag?
A peeled chopped apple in a bag
A peeled, chopped apple in a tin with juice?
A peeled, chopped apple in a tin with syrup?
A peeled, chopped apple in a tin with juice and ground cinnamon?
Can it be pasteurized? Homogenized? or have some other sort of preservation treatment?
What additives can be used? Salt? Sugar? if so how much?
Can raw form include concentrates?
Can it be heated? i.e. is a stewed apple still "raw form" if nothing else changed?
Can it be dehydrated?
If multiple "raw forms" are combined, is it still raw form?
This is a noble idea but it is a nightmare in practice. Define what a basic food is? Is frozen vegetables a basic food? Is bread a basic food. If so does the $10 loaf from an upmarket bakery still considered a basic food? Are pre chopped vegetables a basic food? What about a burgers, pizza’s etc. The compliance cost would be a nightmare as it was in Australia when GST was introduced. There a much simpler ways of ensuring the GST portion of the cost is affordable. Creating a tax free threshold at the bottom end of the scale and then slightly lowering the threshold of one of the others can give an effective tax cut to lower income earners without any difference to higher earners.
The public just needs to support competition, instead of dutifully trotting down to the local branch of the cartel, as advised by the flashy advertising they are paying for through their purchases. Better quality produce is half the price at our local farmers market. But no. Having a good whinge and expecting to be spoon fed is the order of the day!
The first problem in comparative pricing is quality. Don't compare export quality with the stuff were are left with in our supermarket. The quality of meat here is poor and its expensive. Steak quality is random and is generally tasteless to the point I prefer a quality low fat mice in a Spaghetti Bolognese anytime but you have to juice the hell out of it with 3/4 of a cup of Shiraz, Italian herbs, onions and garlic to make it a meal to die for.
In the 70/80s a lot of local abattoirs upgraded to export standard. That actually was a double edged sword because the EEC had imposed stringent and expensive standards with the aim to price NZ meat product off the market. Therefore that meant that a lot of product, eg mutton carcasses, incurred that high processing cost regardless of the fact it was never going to end up there, but nonetheless, that cost was sought to be recovered in pricing for the local market.
I like my read meat as much as the next person, but health wise chicken is as good if not better. Taste wise it's different, sure, but chicken meals can be made to be as tasty as red meat ones in my opinion, not everyone will agree there. Red meat is more expensive to produce and is in demand, so naturally it should be more expensive.
The animal welfare issues around poultry farming are certainly a concern, and perhaps there should be better standards in place there which would increase the price of chicken.
Chicken and pork are cheap protein because of their fast breeding potential and quick growth rates. Which equates to the perfect human protein requirement. All indoors with crops or food scraps brought in to them. I honestly don't see a problem with producing food like that. So our sheep and cattle roam around eating grass but most are locked into small paddocks and moved everyday. Most have no shelter from wind or rain let alone the sun, poor buggers. So ladies and gentlemen, what do you propose we should eat?
This might be a huge eye opener for you: http://watchdominion.com
You think that's natural?.. Have you looked at the biomass figures for animals bred for human use vs wild animals on the planet currently? You don't need to look far to see how destructive and removed from nature it is. We'll eventually see change in this area once the impact can no longer be ignored, and that time is coming. But don't worry, long before your way of thinking dies out, any real change will already be far too late.
I have seen chickens eat their own flock while they are still alive & eggs in the nest and ducks strangle ducklings. If anything humans cause far less pain and trauma than the bird species we eat do to each other. Fact of life and nature. These birds are omnivorous and humans are as well (we tend to try to avoid farming pure predators though for obvious reasons in that they are more solitary, difficult to work with and bad for health when eaten). We just apply laws and standards, birds don't. Or do you think the animals you eat also have a moral code when it comes to your time to be dinner. You are such an urbanite you have never seen or lived with these animals long enough to see how dark and violent their natural behaviour is even when given optimum conditions and plenty of space and food. Nature is not green and fluffly cuddles. It is more the colour of blood and shit. And if you raise chickens you might see a lot of both from their own actions (even with ample and nutritionally balanced food).
https://www.iflscience.com/plants-and-animals/universe-25-the-mouse-uto…
Talking about animals being cruel. This experiment put half a dozen mice in the perfect utopia and watched what happened.
Population peaked at 2000, and since there was nothing to do, they lost interest in reproducing and went extinct rapidly afterwards.
Sounds comparable to the human population in developed countries with less than sustainable birth rates...
How much have you actually read and seen of these 'perfect utopia' experiments? Unlimited access to food and water, while confined in a small environment that was then further segregated, where the location of the food and other aspects were manipulated to create stressful situations for the inhabitants, is hardly a utopia for anyone.
You rush to call me an urbanite, with no idea of my background or experience. This must be your go to accusation for anyone who expresses a different opinion about this. I'm well aware that nature is not a Disney movie. But animals in these systems have been bred so extensively through the years and so removed from their natural environment, that it is hardly any wonder why they exhibit such behaviour to a much greater extent than is natural to them. Take any animal and put it in such a system - many of them deprived of the opportunity to nurture their young as they naturally would, or at all, before they are ripped away, for generation after generation of human controlled breeding, and see what this does to them and their instincts. They are not so different, that such interference does not affect them as it would us.
You think you understand nature so well, yet you have no problem manipulating, distorting and twisting it so extensively to benefit yourself, and still call the result of this natural. The only thing truly natural about such a horrific system, is our all too human propensity for the dark and violent nature you mention. Nothing can hope to compete with us there.
Actually the wild species closely related to these birds (and there are still many not bred through animal husbandry over the millennia) are far more violent and even less able to tolerate others of their species. It seems you really are entrenched in city views as you did not even bother to research species natural behaviour without human influence outside of your little bubble. Next time try to learn a little bit more about animals before you go on proselyting to outcomes that would only further harm multiple species, including other more vulnerable humans.
The NBR Rich List is peppered with current and former supermarket owners.
ALDI AU Scotch Fillet on sale NZ$ 26.90 (converted) Countdown on sale $31.90 kg normally $37 kg
ALDI AU 1kg Beef mince NZ$ 10.75 kg Countdown $15.50 kg normal price
ALDI AU 500kg Tasty Cheese NZ$ 5.36 Countdown $10.00 kg Both home brands
Between now and October beef schedules sit at their highest as numbers of fat cattle are at the lowest at the end of winter early spring. With lamb, numbers peter out at this time til new season lambs hit the market. Its really not a great time to do a comparison. Try the other 9 months of the year.
The earnest naifs who urge the foobarring of GST need to recognise three essential aspects of defining 'food', 'processed', 'basic' and the like:
- Supermarkets carry between 10 and 40 thousand SKU. Not all are food but the majority are. So the maintenance task alone of correctly defining the tax treatment of each and every item is immense. Who pays? Check a mirror.
- Suggesting differential tax opens a massive can of worms and completely foobars the simplicity and lack of exemptions which our current regime, whatever else its flaws, provides. Be careful whatcha wish for....
- Observe the experience of our neighbour across the ditch. Even figuring the correct input deductions allowed for various stripes of food outlets is a Gubmint job creation scheme extraordinaire. Guess who pays...
. I seem to have explored this topic before.....
See my comment a few above yours. Whether it is good/easy/bad/difficult to remove GST from basic food items, it IS done in Australis and Great Britain, it is not here, so I have found a considerable amount that explains some of the discrepancy between the price of a leg of lamb here and the price there, freight notwithstanding.
You clearly have neglected the overheads of ATO: try deciding which 'food' retailer you are, and start to think about compliance, accounting, penalties if you get it wrong, and who pays for all of the above....https://www.ato.gov.au/Business/GST/In-detail/Your-industry/Food/
They can track arbitrary points & points bonuses that change from day to day against each individual purchase item I think a very rarely changing tax value is far less work computationally and with far less human input. After all they don't need to change the tax like they do for pricing and points corresponding to items for different stock week to week, day to day. The tax field is far less of a concerning part of the equation done by computer at the very end as it stays mostly unchanged long term than did Bob type in the right price & discounts each day for the special ticket items and print out the right labels (where the price changes almost on a weekly/daily basis not the tax rate applied automatically by the service & database register).
Supermarkets carry between 10 and 40 thousand SKU. Not all are food but the majority are. So the maintenance task alone of correctly defining the tax treatment of each and every item is immense. Who pays? Check a mirror.
Most of this work would only be done once, though. Yes, new SKUs get periodically introduced, but almost everything in the produce department would be GST exempt. Maybe some frozen things end up being exempt. When a supplier sells you a new product you've never had before, in addition to telling you the country of origin, they tell you the GST compliance required, and you simply load that into the computer system at that time.
I think the only really valid concern is that removing GST off 'healthy' or 'basic' food or whatever you want to call it, is perversely much more beneficial to high income households than it is low income ones, because they would spend more in total on that GST and thus it works out as a bigger savings for them. Although in percentage terms, the low income households save more.
So the argument is we should keep GST as-is, and provide targeted assistance to low income households. Which is what the government actually does, but perhaps they need more assistance or better targeting.
They can track arbitrary points & points bonuses that change from day to day against each individual purchase item I think a very rarely changing tax value is far less work computationally and with far less human input. After all they don't need to change the tax like they do for points corresponding to items for different stock week to week, day to day. I have managed sales stock and ERP systems, trust me the tax parts are very far from the part any actual human work goes into and the price is far more likely to change (hence the limited one off work to add a tax field is already being done on a daily scale for all items everyday anyway for other fields). Or do multiplication and basic sums scare you so much you fear even letting a computer or calculator do them for you.
Because nowhere in the world is there a database register for the price of items and the ability to record the tax against them. Nope we cannot track the prices of stock either for the same reason that database technology or code scanning readers for packaging have not been invented yet... Oh wait.
All of Youse have concentrated on the technical aspects at point of sale. No-one has grasped the real nettle - the introduction of arbitrariness, special pleadings, and pork-barrel politics into the definitions of tax rates for classes of items. So in Oz, a glazed bun is ok as glazes are not Processing, but add poppy seeds on top and whoops, Processed. One can easily imagine the procession of carve-outs which would ensue, as every single-issue group appears before the Commissioner of Revenue to present their case. Soon, there would be a massive Directory of Food, as in Oz, to guide the hapless retailer, baker, cafe, roadhouse or delicatessen through the Byzantine maze of Food Taxes. Still, glass half full, hunting, fishing, and home veges will remain Exempt from the basilisk stare of IRD.....And it would be, to continue the meme, a Happy Hunting Ground for lawyers, tax practitioners, accountants, and other Legal Eagles and Birds of Prey. Why, it could get as good as the Navigational Consultants needed as pathfinders for District Plans in an RMA context. All economic dead weight.....all negative productivity. Careful wotcha wish for.....
Actually as a big data specialist the 2 key difficulties with calculating the pricing in this scenario lies in the potential for combination products and arbitrary human definitions of processed and unprocessed which can change for every new product that appears (thousands of new products get developed every day, not all of them successful). Once you surmount the “human” factor you are left with the computational infeasibility of working out actual rates for all combinations of all products (O^n^x) is the way we would have expressed it back in University. When n and x are both potentially infinite (as you could potentially combine an unlimited number of different products in an unlimited number of different ratios). Pre computing a single cardinality of infinity and storing it in a finite database is impossible (we just compute the specific figures as required). Trying to pre compute and store data at the second cardinality of infinity sounds like something that only you can possibly help us with. I do look forward to you advancing the field of big data soon :)
DP..darn it...but found the old blawg item...https://waymad.blogspot.com/2017/11/ah-gst-i-hardly-knew-ye.html?m=1
To Firstclass, As a farmer myself I would have to come to the defence of the retailers. Most meat processors pay for the cartage of the animals from the farm then they process the whole thing into whatever cuts. Always remembering they have invested millions in to the factories where this is done. Then there is the refrigerated storage( not cheap) and on to refrigerated trucks to be distributed around the country. Then you have further processing at the supermarkets and someone has to put the product on the shelf. I could go on but you can surely understand that everyone has to be paid along the way.
To Firstclass, As a farmer myself I would have to come to the defence of the retailers. Most meat processors pay for the cartage of the animals from the farm then they process the whole thing into whatever cuts. Always remembering they have invested millions in to the factories where this is done. Then there is the refrigerated storage( not cheap) and on to refrigerated trucks to be distributed around the country. Then you have further processing at the supermarkets and someone has to put the product on the shelf. I could go on but you can surely understand that everyone has to be paid along the way.
I'm surprised there's no Cooperative supermarket here like there is in the UK.
It's not-for-profit and pays rewards to people who sign up. Generally cheaper than some of the others (although aldi and lidl may have changed that) but with some ethics thrown in.
Just like farmlands for groceries really.
Thanks for that, I hadn't realised that.
Not quite the same as the UK Coop though where Joe public can be a member. It would be good to have consumers being owners as well, otherwise it's still all about profit.
EDIT: Funny, I just saw this on Stuff https://www.stuff.co.nz/business/125882108/new-world-store-owner-spoke-… not quite got the ethics of the UK Coop
Just facilitate entry into of the NZ market by the likes of Lidl and Aldi. Then sit down and admire the NZ duopoly suffer a while and then be forced to price reasonably all their products.
The current situation is a joke and a clear result of the lobbying by the grocery mafia in NZ. Sadly, we have had Governments with no balls whatsoever to act decisively in favour of a real free market in benefit of the consumer.
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