Prices Drop For Sheep And Beef Farmers

Prices paid to sheep and beef cattle farmers and meat manufacturers both fell sharply in the March 2020 quarter, Stats NZ said today.

Sheep, beef, and grain farmers received 11.5 percent less for their products in the March quarter, reversing rises over most of 2019. In turn, prices paid to meat manufacturers were down 4.4 percent in the March quarter.

“The sharp fall in prices for sheep and beef farming in the first three months of 2020 coincided with dry conditions in many parts of New Zealand, with sheep and beef prices falling,” business prices acting manager Geoffrey Wong said.

“Farmers were reported to be sending stock off to meat works early because of the drought.”

“We also saw some supermarket meat prices fall in March, with lower prices for lamb chops, beef sausages, and beef mince,” Mr Wong said.

See

Cauliflower prices on the march

for more information about food prices in March.

Prices paid to dairy cattle farmers decreased 0.6 percent in the March 2020 quarter. The payout for raw milk remained unchanged this quarter, so the decrease was due to prices paid for livestock.

The farm expenses price index also shows prices to buy livestock fell 2.4 percent in the March 2020 quarter, while fuel prices also fell (down 6 percent) in the quarter. Overall, prices paid by farmers for a range of goods and services were unchanged in the quarter, with livestock and fuel prices offset by rises elsewhere.

Livestock prices were also a key contributor to the drop in overall costs faced by businesses.

Other key industries

Prices received by petroleum and coal product manufacturers fell 9.3 percent in the March 2020 quarter. Prices in this industry show some volatility from quarter to quarter.

“The drop in the March 2020 quarter coincided with plunging world crude oil prices in the month of March as the global COVID-19 pandemic reduced demand for crude and refined oil internationally,” Mr Wong said.

“In New Zealand we saw estimated weekly traffic counts in the main centres drop roughly 75 percent during the alert level 4 lockdown, near the end of March.”

See

Some indicators pick up as New Zealand moves out of lockdown

.

However, the falls were more than offset by smaller price rises across a range of other industries. For example, prices received for rental and hiring services, such as rental cars, rose 5.7 percent in the March quarter.

Overall prices for goods and services produced in New Zealand rose 0.1 percent in the March 2020 quarter, when compared with the December 2019 quarter.

Over the same period, costs faced by businesses dropped 0.3 percent. A key contributor to this decrease were prices associated with electricity generation. Across the electricity and gas supply industry, prices were down 4.9 percent.

Correction

The producers price indexes (PPI) for the September and December 2019 quarters have been corrected due to a processing error. This impacts on the PPI all industries indexes. See

Business price indexes: March 2020 quarter

for more detail.

© Scoop Media