Why are NZ carrots so expensive?
Discussion
This is a question for the economists or perhaps farmers on PH.
There are many advantages to being in NZ, particularly during a global pandemic, but some negatives too, cost of food being one of them. This applies across the board but I’ve chosen carrots as an example because they are a basic, staple vegetable in both countries.
The current price at Tesco’s is £0.4 per kg. In NZ they are £1.4. So three and a half times as expensive.
I am struggling to understand the disparity. NZ has a lot of land and a low population density so I assume that land for farming wouldn’t be more expensive than the U.K. Wages are generally the same or lower in NZ so cost of employment shouldn’t be materially different. Are there special ways of growing carrots in the U.K. that makes them cheaper? Seems hard to imagine.
Housing and other costs are high here in NZ and taxes are similar so it isn’t that people have more money to spend.
Transport costs might be higher here - it is a bigger country and I’m not sure where they are grown. But not sure how much difference that would make.
Big difference in NZ is a relative lack of competition - just two major Supermarket chains. But could that really account for a 250% price difference?
Any further suggestions as to what is causing such a big difference.
There are many advantages to being in NZ, particularly during a global pandemic, but some negatives too, cost of food being one of them. This applies across the board but I’ve chosen carrots as an example because they are a basic, staple vegetable in both countries.
The current price at Tesco’s is £0.4 per kg. In NZ they are £1.4. So three and a half times as expensive.
I am struggling to understand the disparity. NZ has a lot of land and a low population density so I assume that land for farming wouldn’t be more expensive than the U.K. Wages are generally the same or lower in NZ so cost of employment shouldn’t be materially different. Are there special ways of growing carrots in the U.K. that makes them cheaper? Seems hard to imagine.
Housing and other costs are high here in NZ and taxes are similar so it isn’t that people have more money to spend.
Transport costs might be higher here - it is a bigger country and I’m not sure where they are grown. But not sure how much difference that would make.
Big difference in NZ is a relative lack of competition - just two major Supermarket chains. But could that really account for a 250% price difference?
Any further suggestions as to what is causing such a big difference.
Competition is definitely one issue, and also vege growing here is properly seasonal, we can't just ship in from AUS or anywhere else as cheaply as shifting stuff across Europe. Also NZ is big on exporting beef and dairy, and lamb to a lesser extent, not so much on veges. Much of the land isn't suitable for veges in any case. Just wait til the price of one leek hits $2.99 - its no wonder the lesser well off resort to junk food.
Probably not much staple veg grown in NZ as the land is instead used for beef, dairy, wool, and vineyards which are all far more profitable.
So most of it is likely imported. And as NZ is pretty far away from anywhere else, has low economies of scale, and essentially a supermarket monopoly, groceries are going to be pricey.
So most of it is likely imported. And as NZ is pretty far away from anywhere else, has low economies of scale, and essentially a supermarket monopoly, groceries are going to be pricey.
dvs_dave said:
Probably not much staple veg grown in NZ as the land is instead used for beef, dairy, wool, and vineyards which are all far more profitable.
So most of it is likely imported. And as NZ is pretty far away from anywhere else, has low economies of scale, and essentially a supermarket monopoly, groceries are going to be pricey.
And subject to very strict phytosanitary controls iirc, making it even less attractive as an export destination.So most of it is likely imported. And as NZ is pretty far away from anywhere else, has low economies of scale, and essentially a supermarket monopoly, groceries are going to be pricey.
HappyClappy said:
You’ve only had four years of Tony Blair in a skirt when she reaches 13 years in power the price of carrots will be the last thing you are complaining about.
Perhaps you should change your eating habits to pak choy and pea shoots.
Perhaps you should change your eating habits to pak choy and pea shoots.
Or just maybe there isn't enough space for massive mechanised farming and it's not an easy lorry journey from countries that can.
Is there some sort of special prize for starting the most stupid threads where the topic is a question?
What's the motive? Back in the day this sort of thing was about building up an account with posts before abusing it, this just seems to be about posting inane threads and seeing how many people will respond seriously to any old crap.
What's the motive? Back in the day this sort of thing was about building up an account with posts before abusing it, this just seems to be about posting inane threads and seeing how many people will respond seriously to any old crap.
Just a guess, but supply & demand
Supply is limited by suitable growing area
Demand is high due to export market in Japan
In U.K. I don’t believe we have an export market with such high demand so often in surplus that affects price.
It used to be said carrot growers made big money one year in 10 although I think that might’ve levelled out a bit now supply chain is more organised & controlled these days
Supply is limited by suitable growing area
Demand is high due to export market in Japan
In U.K. I don’t believe we have an export market with such high demand so often in surplus that affects price.
It used to be said carrot growers made big money one year in 10 although I think that might’ve levelled out a bit now supply chain is more organised & controlled these days
Edited by AndyAudi on Friday 30th April 08:22
Also worth remembering that if you ship goods to the UK you have a market of 70 million people.
If you ship goods to NZ (likely at higher cost to start with) you have a market of <5 million.
Not only is there the cost saving of doing things in bulk, but for perishable goods a small market means a high probability of wastage. The UK market is big enough that even if Alice decides not to buy carrots this week, Bob will probably buy them instead, so demand is smooth.
If you ship goods to NZ (likely at higher cost to start with) you have a market of <5 million.
Not only is there the cost saving of doing things in bulk, but for perishable goods a small market means a high probability of wastage. The UK market is big enough that even if Alice decides not to buy carrots this week, Bob will probably buy them instead, so demand is smooth.
Dr Doofenshmirtz said:
I'm always surprised (and pleased) at how cheap Bananas are...a bunch of 6 or 7 for a quid, considering they've come from some far flung land it's pretty good value!
I was thinking this the other day, my banana I bought with my lunch was 13p yet it had been grown in Colombia, shipped across the Atlantic in a specially adapted container, transported all the way to Scotland where presumably the supermarket selling it manages to actually make a profit on something with a sales price of 13p, that after a week or so would be worthless!Esceptico said:
This is a question for the economists or perhaps farmers on PH.
There are many advantages to being in NZ, particularly during a global pandemic, but some negatives too, cost of food being one of them. This applies across the board but I’ve chosen carrots as an example because they are a basic, staple vegetable in both countries.
The current price at Tesco’s is £0.4 per kg. In NZ they are £1.4. So three and a half times as expensive.
I am struggling to understand the disparity. NZ has a lot of land and a low population density so I assume that land for farming wouldn’t be more expensive than the U.K. Wages are generally the same or lower in NZ so cost of employment shouldn’t be materially different. Are there special ways of growing carrots in the U.K. that makes them cheaper? Seems hard to imagine.
Housing and other costs are high here in NZ and taxes are similar so it isn’t that people have more money to spend.
Transport costs might be higher here - it is a bigger country and I’m not sure where they are grown. But not sure how much difference that would make.
Big difference in NZ is a relative lack of competition - just two major Supermarket chains. But could that really account for a 250% price difference?
Any further suggestions as to what is causing such a big difference.
You’ve mentioned the Tesco price.There are many advantages to being in NZ, particularly during a global pandemic, but some negatives too, cost of food being one of them. This applies across the board but I’ve chosen carrots as an example because they are a basic, staple vegetable in both countries.
The current price at Tesco’s is £0.4 per kg. In NZ they are £1.4. So three and a half times as expensive.
I am struggling to understand the disparity. NZ has a lot of land and a low population density so I assume that land for farming wouldn’t be more expensive than the U.K. Wages are generally the same or lower in NZ so cost of employment shouldn’t be materially different. Are there special ways of growing carrots in the U.K. that makes them cheaper? Seems hard to imagine.
Housing and other costs are high here in NZ and taxes are similar so it isn’t that people have more money to spend.
Transport costs might be higher here - it is a bigger country and I’m not sure where they are grown. But not sure how much difference that would make.
Big difference in NZ is a relative lack of competition - just two major Supermarket chains. But could that really account for a 250% price difference?
Any further suggestions as to what is causing such a big difference.
What’s the price in:
Asda
Sainsbury’s
Morrison’s
Aldi
Lidl
Waitrose
Budgens
Co-op
Iceland
Marks and Spencer
Costco
FarmShop
Ocado
Corner shop
Amazon (ffs)
Carrots Direct
You see where I’m going...?
Esceptico said:
Any further suggestions as to what is causing such a big difference.
One is economies of scale. 4m people live in NZ, 60m live in the UK. The economics of growing, packing, distribution, retail, etc, mean that the cost per kilo will be less.Another is subsidy - British farmers are incentivised to grow produce we need through subsidies that make it worth their while - previously disseminated via the EU but now direct from Government (I assume). This keeps key nutrients in the supply chain at reasonable prices and stops - or limits - farmers growing low-yield / high margin produce or turning their farms into Golf Courses.
Presumably NZ does not have the likes of Tesco, Sainsbury, etc screwing the prices from suppliers down to almost unsustainable levels becaues we as consumers love a good bargain.
I wish somebody would please spare a few thoughts for the poor British farmers
How does the price of lamb compare, it seems very expensive here in the UK, especially NZ lamb.
I wish somebody would please spare a few thoughts for the poor British farmers
How does the price of lamb compare, it seems very expensive here in the UK, especially NZ lamb.
Monkeylegend said:
Presumably NZ does not have the likes of Tesco, Sainsbury, etc screwing the prices from suppliers down to almost unsustainable levels becaues we as consumers love a good bargain.
IIRC some of them do have deals with UK supermarkets to resell some own-brand products - presumably it's much cheaper and easier to simply buy in something like own-brand spices rather than chasing down suppliers and the hassle of contracts, labeling, shipping etc, when they can just call Tesco or whoever and order a container load of whatever they need.Interesting Stats
I guessed exports to Japan but here’s the stats of countries importing carrots etc from New Zealand.
Guessing this is what keeps market prices high
https://wits.worldbank.org/trade/comtrade/en/count...
I guessed exports to Japan but here’s the stats of countries importing carrots etc from New Zealand.
Guessing this is what keeps market prices high
https://wits.worldbank.org/trade/comtrade/en/count...
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