Butter prices have fallen to a 19-month low, with other dairy products also recording price drops.
Stats NZ food price figures show butter fell 10 percent in February with the average price for a 500g block of butter falling to $5.20, down from a record high of $5.79 in the previous month.
Consumer prices manager Gael Price said the price fall now looks to be flowing on to other dairy products.
"In February 2019 prices fell for cheese (down 4.1 percent), yoghurt (down 6.7 percent), and milk (down 0.2 percent)", she said
Global dairy trade auction prices fell between June and November 2018, and that was reflected in lower dairy export prices in the December 2018 quarter.
"The lower international prices appear to have been passed on to New Zealand consumers, with the usual lag of a few months," said Ms Price.
Despite cheaper dairy products, overall food prices rose 0.4 percent in February 2019, mainly due to higher prices for soft drinks, waters, and juices.
Soft drink prices rose 8.4 percent in February 2019, reaching $2.70 per 1.5 litre bottle.
"Soft drink prices usually rise at this time of the year after typically being discounted over the summer."
Prices for confectionery rose 1.9 percent in February 2019, in part reflecting signs of 'shrinkflation'. This was because some packets reduced in size, but their prices did not fall as much..
"We noticed the weight of some sweet packets were cut in February, when we collected prices on supermarket shelves. We may continue to see more shrinkflation in the coming months as new stock replaces old."