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Speaker 1: Food prices up five percent in the year to August.

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Speaker 1: The dairy main driver mel cup sixteen percent, cheese up

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Speaker 1: twenty six percent, butter up thirty two percent, meat, poultry,

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Speaker 1: fish all up eight point one percent. Brad Olson in

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Speaker 1: for Metrics with us this morning. Brad, good morning to you.

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Speaker 2: Good morning. Hey.

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Speaker 1: Did you see the global dairy trade auction numbers overnight?

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Speaker 2: Your thoughts I did a little bit down, I think,

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Speaker 2: probably highlighting that look, we're still seeing our across the

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Speaker 2: globe a bit of trying to find where things are

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Speaker 2: going to level out in terms of both supply and demand.

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Speaker 2: But I think also again on one hand, encouraging for

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Speaker 2: households in the sense that you haven't seen in the

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Speaker 2: food price data but is basically been flapped the last

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Speaker 2: three months. But at the same time, if you're starting

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Speaker 2: to see the GDT come down, it does just make

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Speaker 2: you a bit nervous about those very high commodity prices

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Speaker 2: that we're getting at the moment. If the GDT continues

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Speaker 2: to fall, then yes, you might have ever so slightly

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Speaker 2: cheaper butter prices, but the primary sector might not be

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Speaker 2: earning quite as much either.

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Speaker 1: Yeah, but they are expected to I mean either hold,

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Speaker 1: they should actually get to new record highs. According to

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Speaker 1: some economists.

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Speaker 2: The yeah, well, I mean we're certainly hopeful of those

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Speaker 2: better times to come. But again, I mean, you see

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Speaker 2: that coming through in the food price data released yesterday,

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Speaker 2: which does highlight that from a household perspective, you're still

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Speaker 2: seeing some pretty big costs. Interestingly, though, again we're still

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Speaker 2: seeing that those cost pressures are coming through in a

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Speaker 2: more contained fashion. So you know, go back a couple

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Speaker 2: of years when inflation was running rampant, and you really

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Speaker 2: still quite a broad based level of inflation. Just about

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Speaker 2: everything was increasing in price at a fairly rapid pace. Nowadays,

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Speaker 2: it's not everything. It's just that it's quite a few

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Speaker 2: of the high frequency items that you notice a whole

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Speaker 2: lot more. It's the fact that you know, minces increased significantly,

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Speaker 2: steak all of your dairy. But we've also seen in

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Speaker 2: the latest food price numbers just a few bits of easing.

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Speaker 2: The likes of olive oil prices, which we're very high

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Speaker 2: a couple of years back, are now starting to come down.

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Speaker 2: The likes of coffee prices also easing, ever so slightly,

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Speaker 2: still elevated, still expensive, but continuing to sort of shift

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Speaker 2: in the right direction, you'd.

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Speaker 1: Say, outside bred, outside of food. We are seeing rents

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Speaker 1: come down though, right, So does that sort of I

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Speaker 1: mean I see ASP's come out and said they probably

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Speaker 1: are picking two point nine percent for September, which is

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Speaker 1: below forecast of the RBNZ. So is there actually a

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Speaker 1: silver lining to all this?

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Speaker 2: Well, I think it's just so mixed depending on exactly

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Speaker 2: who you are and what you're buying. Yes, we've seen

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Speaker 2: that that rental pressure has really eased back. That's generally

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Speaker 2: a lot more concentrated in our urban centers, Auckland and

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Speaker 2: Wellington in particular, So if you're renting in the regions,

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Speaker 2: you're probably still not seeing all that much of a

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Speaker 2: better sort of position there. But the one that worries me,

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Speaker 2: I think the most. We spend a lot of time

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Speaker 2: talking about rent and about food, but it's the energy

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Speaker 2: prices that really get me. The fact that electricity and

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Speaker 2: gas are up something like eleven and fourteen percent year

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Speaker 2: on year respectively. Those are some pretty big gifty increases

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Speaker 2: coming through for what are fairly vital costs. You can't

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Speaker 2: choose not to have electricity or gas. You need to

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Speaker 2: be able to sort of heat your home and cook dinner,

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Speaker 2: So all of those sort of pressures show that look,

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Speaker 2: it's mixed out there. But even then getting towards the

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Speaker 2: top of the target band, yes, the reserve banks still

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Speaker 2: got more scope to cut things, but realistically that's still

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Speaker 2: an uncomfortable level of inflation for everyone to be having

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Speaker 2: to handle.

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Speaker 1: Appreciate your time, Brad brad Olson, Informetric's chief economists.

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