Sharechat Logo

NZ producer prices fall in the second quarter as dairy prices decline

Tuesday 19th August 2014

Text too small?

 

New Zealand producers' input and output prices fell in the second quarter of this year as dairy prices declined.

 

 

Producer output prices, which measure the prices received by New Zealand producers, fell 0.5 percent in the three months ended June 30, Statistics New Zealand said. Input prices, representing the prices of goods and services used by local producers, fell 1 percent in the quarter.

 

 

Prices for dairy products have weakened this year as farmers increased production to take advantage of higher prices, resulting in a build up of inventory in China and falling demand in some emerging markets. Fonterra Cooperative Group's GlobalDairyTrade auction tomorrow morning will be closely watched after dairy product prices slumped to the lowest level since October 2012 in the last auction. Lower prices for raw milk in the second quarter led an 11 percent decline in the prices received by dairy cattle farmers and a 9.4 percent decrease in input prices paid by dairy product manufacturers, the statistics agency said today.

 

 

"Lower milk prices contributed to decreases in both the input and output producers price index in the June quarter," Statistics NZ prices manager Chris Pike said.

 

 

In the June quarter, the output dairy product manufacturing price index fell 2.9 percent, reflecting lower prices for milk powder.

 

 

Cheaper electricity prices also weighed, with the input electricity and gas supply price index down 8.4 percent due to lower prices for electricity generation. Lower electricity prices reflect spot-market conditions, a shift towards geothermal procuction over thermal gas-fired generation and higher lake levels, the statistics agency said.

 

 

On an annual basis, producer output prices were up 2.5 percent while input prices rose 1.4 percent.

 

 

In a separate release, the capital goods price index, which measures changes in the price of new fixed assets bought by local producers, rose 0.7 percent in the second quarter for an annual rise of 2.2 percent. That was led by a 1.3 percent increase in residential building and a 1.1 percent increase in non-residential buildings.

 

 

The quarterly capital goods increase was partly offset by a fall in the prices for plant, machinery, and equipment, which declined 0.3 percent as a result of an increase in the New Zealand dollar.

 

 

 

 

 

(BusinessDesk)

 

BusinessDesk.co.nz



  General Finance Advertising    

Comments from our readers

No comments yet

Add your comment:
Your name:
Your email:
Not displayed to the public
Comment:
Comments to Sharechat go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.

Related News:

Rip Curl purchase a done deal on Kathmandu proxies alone
Comvita chair Neil Craig eyes the exit once he finds a new CEO
Mercury raises guidance on increased storage, high spot prices
Eroad reports strong 3Q sales growth, eyes ASX listing
MediaWorks puts TV business on the block
NZ dollar benefits as preliminary Brexit deal improves risk appetite
ANALYSIS: Why banks don't pass on full OCR cuts
NZ Europeans make up 80% of business leaders, survey shows
Zespri tries to whet American appetite for kiwifruit
MARKET CLOSE: NZ shares fall as Pushpay follows Aussie software firms lower

IRG See IRG research reports