NZ producer input, output prices rise on rebound in dairy

Monday 21st November 2016

New Zealand producer input and output prices rose in the third quarter, largely on the back of the rebound in prices of dairy products and the resulting upgrades to the farmgate milk payout.

Prices paid by producers - input prices - rose 1.5 percent in the three months ended Sept. 30, while output prices, or prices received by producers, rose 1 percent, Statistics New Zealand said.

Last week Fonterra Cooperative Group raised its forecast payout to farmers by 75 cents to $6 per kilogram of milk solids for the 2016-2017 season, while affirming earnings per share of 50-to-60 cents. Supply and demand have come back more into balance as production falls in Europe, Australia and New Zealand, helping drive dairy prices higher in seven of the past eight GlobalDairyTrade auctions. Fonterra is forecasting its annual milk collection to fall 7 percent in the face of wetter-than-normal spring growing conditions.

The main drivers of the increase in producer prices were a 28 percent gain in prices received by dairy cattle farmers and a 22 percent gain in prices paid by dairy product manufacturers.

Statistics New Zealand was forced to vacate its Wellington headquarters after last week's earthquake, which disrupted access to its database and its ability to release economic figures to schedule. The department today apologised for the delays, saying it hasn't lost any data but "a number of our systems need to be brought back up to restore all our services".

BusinessDesk.co.nz

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