NZ producer input prices falls in third quarter, led by dairy, electricity

Monday 16th November 2009

New Zealand producer input prices unexpectedly fell in the third quarter, led by a slump in farm-gate milk prices and electricity.

Producer input prices dropped 1.1% from the second quarter to be 5.8% lower from the same period a year earlier, according to Statistics New Zealand. No change was expected in the latest quarter, according to a Reuters survey.

The dairy product manufacturing index tumbled 20.9% in the third quarter, the biggest contribution to the decline in input prices and the largest drop since the third quarter of 2002.

The government statistician only records payments for milk in the third quarter though it plans to change the way it records price movements starting in the fourth quarter. The electricity generation and supply index fell 8.2% in the latest three months, reflecting lower costs for generation and supply, and reduced prices for natural gas.

Producer output prices, which producers receive, declined 1.4% in the third quarter to be 2.1% lower than in the same period of 2008.

The dairy cattle farming index tumbled 24.3, the largest decline since the series began in June 1994, reflecting a decline in farm-gate milk prices.

The dairy product manufacturing index fell 10.9, on lower prices for exports of whole-milk powder, milk, cream, cheese and butter.The petroleum, coal and basic chemical manufacturing index declined 9.2%.

Businesswire.co.nz

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