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Dairy prices push down producer prices

Fuseworks Media
Fuseworks Media

Producer prices fell in the December 2014 quarter, due to lower dairy prices, Statistics New Zealand said today. Prices received (as measured by the output producers price index (PPI)) and paid (as measured by the input PPI) both fell in the December 2014 quarter, down 0.1 percent and 0.4 percent, respectively.

"Lower prices received by dairy manufacturers and paid to dairy farmers were the main contributors to falls in both the output and input PPI in the December 2014 quarter," prices manager Chris Pike said.

Prices received by dairy product manufacturers were down 10 percent, reflecting lower milk powder prices; and the prices received by dairy farmers were down 9.9 percent, due to lower farm-gate milk prices.

Petroleum and coal product manufacturing (down 7.5 percent) also contributed to the overall decrease in output PPI for the December 2014 quarter.

Increased meat and meat product manufacturing output prices (up 8.3 percent) had some offsetting effect on the overall output PPI, due to higher beef export prices.

In the year to the December 2014 quarter, the output PPI was down 0.8 percent, and the input PPI fell 1.9 percent. Prices received by dairy product manufacturers decreased 20 percent, and prices paid by the dairy manufacturing industry decreased 34 percent.

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