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Dairy manufacturers got better prices in June quarter

Monday 19th August 2019

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Dairy product manufacturers received higher prices in the June quarter, which helped boost New Zealand producer margins more generally. 

Prices received by producers, or output prices, lifted 0.5 percent for the quarter, recovering from a 0.5 percent fall in the first three months of this year.

Prices received by manufacturers of butter, cheese, and milk powder rose 8.7 percent in the June quarter compared with the March 2019 quarter, after falls in the previous two quarters, Stats NZ said. 

“The rise in prices dairy product manufacturers receive is consistent with global dairy auction prices increasing in late 2018 and early 2019,” said prices, accommodation and construction statistics manager Melissa McKenzie. 

Global dairy prices have fallen in five of the past six GlobalDairyTrade auctions but “it can take time for prices set at global dairy auctions to flow through to producers’ prices, and there can be a further lag before consumers see price changes," she said. 

Meat and meat product manufacturers also experienced higher prices for their goods in the June quarter, up 3.5 percent, compared with the March 2019 quarter when they fell 4.3 percent. 

Prices paid by producers, known as input prices, rose 0.3 percent in the June quarter after falling 0.9 percent in the prior quarter, Stats NZ's producers' price index showed.

Input prices for dairy manufacturers were up 0.6 percent in the June quarter versus 3.4 percent in the prior quarter. 

Meat and meat product manufacturers, however, saw input prices lift 2.4 percent versus a slide of 5.0 percent in the prior quarter. 

On an annual basis, output prices across all sectors were up 2.2 percent from a year earlier, compared to a 2.4 percent increase in input prices. 

The farm price index, also released today, showed farm input costs fell by 0.1 percent for the second quarter in a row. Farmer input prices were up 2.5 percent on the year.  The biggest fall was in livestock purchases, with input prices down 2.3 percent. Volatile transport fuel prices caused the biggest lift for the quarter, with fuel prices up 4.5 percent after falling 6.7 percent in the prior quarter. 

The capital goods index rose 0.9 percent on the quarter versus a 0.5 percent lift in March. It was up 3.1 percent on the year. 


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