Rabobank, Media Release, 30 April 2025
Inflation ticked higher across the majority of food categories the latest quarterly Consumer Price Index (CPI) data, from the Australian Bureau of Statistics, has shown.
On a year-on-year basis, food and beverage inflation rose 3.2 per cent in the March 2025 quarter data, released today. This was slightly higher than the rate of inflation in the December 2024 quarter (3.0 per cent).
RaboResearch senior food retail analyst Michael Harvey said this marks five consecutive months of food and beverage inflation in the three per cent range.
This quarterly result is slightly above the 10-year average rate of food and beverage inflation (2.9 per cent), he said.
Mr Harvey said the main issue for consumers was in the meat aisles. “The result included a consecutive quarter of double-digit increases in lamb prices reflecting continued increases in livestock costs.”
“Despite the rise in lamb prices (12 per cent year-on-year) we are still three per cent below the high retail prices for lamb seen in 2022,” Mr Harvey said. “Trade lamb prices at the saleyard are six per cent higher than they were at this stage of the year in 2022.”
Egg prices recorded a 12.4 per cent increase in prices – a consecutive quarter of double-digit price increases, he said. “The egg industry has warned of sustained supply shortages and this could mean the price of eggs has more than doubled in two years as supply issues due to bird flu outbreaks and new production capacity take a toll.”
Mr Harvey said dairy aisles were an outlier where there was mild deflation – dairy product deflation was -0.2 per cent. “Consumers need to keep an eye on butter prices with the global price for butter rising again recently and is back near record levels.”
For consumers, fresh fruit recorded a 12.2 per cent increase in prices largely driven by the impacts of Cyclone Alfred, he said. “With higher prices for avocados, bananas and strawberries.”
“The rate of inflation in confectionery and cooking oils continued to moderate but follows a period of rapidly rising prices,” Mr Harvey said. “Global cocoa prices have eased back from record levels as global market fundamentals improve, and which should provide some relief from further retail price increases.”
Mr Harvey said across the rest of the grocery food basket, inflation eased year-on-year in this quarter.
“The cost of food in out-of-home channels rose 2.6 per cent year-on-year in the March 2025 quarter which was slightly below the 10-year average (3.1 per cent),” he said.
