Record prices for butter have pushed up the overall cost of food in the last year.
Photo: RNZ / Eva Corlett
Official figures show the food price index dropped 0.2 percent in August, on the back of cheaper fruit and vegetables.
But the annual rate rose 3 percent because of a strong surge in dairy prices in the past year.
Statistics New Zealand said butter prices were at record levels, increasing by more than half in the past 12 months.
Falls in the price of salad ingredients, fruit, meat and poultry offset more expensive groceries and soft drinks.
Food prices make up about a fifth of the household inflation measure, which is due out next week.