Monday 20 February 2017 11:08 AM
NZ producer input, output prices still lifted by milk prices
By Rebecca Howard
Feb. 20 (BusinessDesk) - New Zealand producer input and output prices rose in the fourth quarter once again lifted largely by rising milk prices.
Prices paid by producers - input prices - rose 1 percent in the three months ended Dec. 31, while output prices, or prices received by producers, rose 1.5 percent, Statistics New Zealand said.
Producer output prices were mainly influenced by higher prices received by dairy product manufacturers, up 14 percent and higher farm-gate milk prices received by dairy cattle farmers, up 13 percent, the department said.
Prices for whole milk powder picked up in the second half of 2016 following a prolonged slump, as demand and supply moved back into balance, with the average price for whole milk powder rising almost two-thirds by December from July.
“Producer prices were driven by a higher forecasted farmgate milk price, which rose to $6.00 a kilo in mid-November 2016. This compares to $4.60 a kilo a year before, and $8.65 a kilo in the March 2014 quarter, when prices received by dairy cattle farmers were at their peak,” business prices manager Sarah Williams said.
Prices received by producers in the mining and construction industries were also up, by 13 percent and 1.6 percent respectively. Construction prices were affected by labour and material costs, Statistics New Zealand said.
On the input side, prices were mainly influenced by prices paid by dairy product manufacturers, up 11 percent, due to the increase in farm-gate milk prices, Statistics New Zealand said. A 5.7 percent rise in petrol prices and an 8.5 percent jump in diesel also contributed to higher input prices paid by producers across many industries.
Prices paid by farmers were unchanged in the quarter and fell by 0.2 percent on the year while capital goods prices were up 1.1 percent in the latest quarter for an annual increase of 3.4 percent.
In the 12 months to December, producer output prices increased 2.5 percent, and producer input prices increased 2.3 percent.