An economist says rising food prices will hit household budgets this year but it will benefit the economy in the long-run.
Although food prices fell 0.6% in November, and 0.8% percent in December as seasonal fruit and vegetables became cheaper, ANZ senior economist, Sharon Zollner says they will rise again this year.
She says growing demand from Asia, and weather problems around the world, including the devastating floods in Queensland and Brazil, will push up prices.
Ms Zollner says New Zealand is "nicely positioned" if food prices go up, because it is a developed country with massive food exports, but food makes up a reasonably small proportion of households' budgets.
Food exports make up 7.5% of New Zealand's GDP, a figure which only Uruguay and Argentina come close to, she says.