While New Zealand is world-renowned for its dairy industry, prices of butter have skyrocketed to the point bakers are turning to overseas products.

The average price of a 500g Kiwi-made block is now $5.39 - with many brands costing $6.

The Baking Industry Association told Radio New Zealand some small businesses are turning to French butter to keep the prices of their products down.

"It is cheaper to get imported French butter, travelling all that distance and up 'til now it has been seen as an extravagance, but it is now cheaper to get that than it is to get stuff across the ditch, association president Kevin Gilbert says.

"It is getting very close to that for us as well."

Bad weather has impacted the price of dairy goods, with farmers' produce affected by heavy rain.

"All productions [are] down and with it being more wet… there's mud around and the [cattle] trample more and there's knock on effects all the way down," Mount Sommers farmer Michael Salverson told Newshub.

Statistics New Zealand shows overall the food price index has increased 3 percent for the year to September. Grocery food prices, which includes dairy, has increased by 3.7 percent and fruit and vegetables have increased 6.5 percent.

Newshub.