NZ producer input, output prices rise in 2Q, led by dairy
Aug. 19 (BusinessDesk) – New Zealand producer input and output prices both rose in the second quarter, led by dairy products after Fonterra Cooperative Group lifted its forecast farmgate payout to farmers and prices rose for exports of milk powder, cheese and butter.
The input Producers Price Index rose 0.6 percent in the second quarter, following a 0.8 percent gain in the first three months of the year, according to Statistics New Zealand. The output PPI gained 1 percent after a 0.8 percent increase in the first quarter.
Prices of dairy products jumped 14 percent to a record in the GlobalDairyTrade auction in early April, reflecting the impact of the drought and have remained at elevated levels since then. Last month, Fonterra lifted its forecast payout to farmers by 50 cents to $7.50 per kilogram of milk solid, reflecting constrained global supplies and a weaker kiwi dollar. It was the second increase in three months.
The input price index for dairy product manufacturing rose 8.6 percent in the second quarter, adding to a 4.5 percent increase three months earlier. In the year, the dairy input PPI rose 8.6 percent, the first annual increase since the 12 months ended June 2011.
The output PPI for dairy manufacturing gained 14 percent, making the largest contribution to the broader PPI. Dairy cattle farming made the second-biggest contribution at 9 percent, and the two indexes combined accounted for more than 90 percent of output PPI in the second quarter.
The price index for export logs rose 9.4 percent in the latest quarter, the biggest jump since the first quarter of 2011. The price index for domestic logs climbed 4 percent.
The price index for electricity for commercial consumers rose 11 percent in the second quarter while they fell 0.5 percent in the year.