Chicken prices are at the lowest level in six years, dragging down the food price index in 2015.

Food prices are falling at the fastest rate since mid-2012, driven by drops in the cost of fresh milk and chicken.

On Friday Statistics New Zealand said that in 2015 food prices fell 1.3 per cent, driven mainly by lower costs of groceries. It was the biggest fall in the food price index since July 2012.

In 2015 grocery costs fell 3 per cent, led by lower prices for breads and cereals and some dairy prices. Fresh milk prices fell 14 per cent compared to the average for 2014.

According to Statistics New Zealand, the average price of the cheapest available 2 litres of blue-top milk was $3.13 in December 2015, compared with $3.64 in December 2014.

Meat, poultry and fish prices are down, with a sharp fall in the price of chicken, Statistics New Zealand's consumer prices manager Matt Haigh said.

"Chicken prices have fallen during the year, with the price for a kilo of chicken breast averaging $14.62 in December, compared with $16.60 a year ago," Haigh said.

In December alone food prices fell 0.8 per cent, the fifth month in a row that the food price index recorded a drop.

ASB said the fall in the price of food was larger than it expected, with the bank now expecting next week's consumer price index to show a 0.3 per cent fall for the December quarter.