Food prices have dropped, but it's not all good news

A selection of pork on display in a butchers shop

It may be hard to believe when you reach the checkout each week, but recently there's been a consistent drop in food prices.

In fact, Statistics New Zealand says grocery prices have been on the decline for the past five years.

The latest drop was 1.3 percent in the year to July.

It's been driven largely by a fall in dairy: 10 percent for cheese, yoghurt and butter, with a 3.2 percent drop in milk.

In July, the average price of a kilogram of cheddar cheese dropped to $7.68 from more than $9 last year, which was the lowest level since September 2007.

According to University of Otago researchers, the weekly cost of a basic diet dropped $4 over the past two years, to just under $60.

However, it's not all good news. Fresh fruit and vegetable prices were up 2 percent, in part driven by the hefty cost of avocados. Honey prices spiked too.

And, with another summer drought set to hurt Canterbury farmers even further, a cut in meat production could see a rise in the price of pork and lamb.

Newshub.

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