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Speaker 1: So butter is bloody expensive. Bakers are buying in bulk

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Speaker 1: from the Assies because it's cheaper. The Internet blames our

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Speaker 1: dairy farmers, the co op that buys their milk, the

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Speaker 1: producers who sell it. But there are a couple of

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Speaker 1: things to point out here. One, we export a hell

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Speaker 1: of a lot more butter to the world than the

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Speaker 1: Aussies do. In twenty twenty three, we exported nine point

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Speaker 1: four tons. Sorry, they exported nine point four tons. Guess

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Speaker 1: what we did four hundred and forty one tons. So

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Speaker 1: they exported two percent of the quantity that we did,

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Speaker 1: and that means our price is more susceptible to the

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Speaker 1: international market price. We export most of our butter, we

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Speaker 1: pay the international price. Australia, on the other hand, eats

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Speaker 1: a lot more of its own butter exports less. This

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Speaker 1: is good and bad. It means we pay the trade price, yes,

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Speaker 1: but it also means that when the price is high,

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Speaker 1: as it has been lately. Our largest company in Fonterra

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Speaker 1: does well. Our farmers do well. They spend more money here,

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Speaker 1: they drive growth in are. Yesterday we learned that was

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Speaker 1: to the tune for the season of fifteen billion dollars

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Speaker 1: being plowed in. Two. Supply issues in Europe have pushed

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Speaker 1: the price the global price. Up Ours is a premium product.

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Speaker 1: It's grass feed, it's sustainable, which is in high demand overseas,

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Speaker 1: and it tastes better. We all know that the exchange

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Speaker 1: rate has also encouraged the large purchases from offshore buyers. Three.

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Speaker 1: When you produce a lot of something, producers will lock

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Speaker 1: themselves into big international contracts because they buy greater volumes

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Speaker 1: than your local retailers would need. The Aussies have this

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Speaker 1: problem with their gas. Australian National University Business economics lecturer

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Speaker 1: David Lehi explains this well. He says, they signed some

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Speaker 1: big money contracts over there to supply enormous amounts of

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Speaker 1: gas at locked in prices, and you pay more in

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Speaker 1: Assie for your Assie gas than you would and somewhere

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Speaker 1: else in the world. He says, even though they could

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Speaker 1: sell it for more domestic, they're locked into these contracts.

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Speaker 1: You can't Number four. We don't actually know the details

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Speaker 1: of that costco butter that's been doing the rounds on

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Speaker 1: the internet lately, do we. Everyone's been raving about it.

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Speaker 1: Is it a lost leader, Is it a marketing POI

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Speaker 1: is it discounted to get people into the store and

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Speaker 1: then simultaneously by forty eight rolls of toilet paper. So yes,

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Speaker 1: Kiwi butter is bloody expensive at home, but the fact

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Speaker 1: it's expensive elsewhere is actually a good thing on the

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Speaker 1: whole for New Zealand. For more from Early Edition with

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Speaker 1: Ryan Bridge, listen live to news Talk set Be from

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Speaker 1: five am weekdays, or follow the podcast on iHeartRadio.