Dairy and fuel push up producer prices

Producer output and input prices rose in the March 2011 quarter, Statistics New Zealand said today. Both indexes were influenced by higher dairy and fuel prices.

The producers price index measures changes in prices received by producers (known as output prices), and changes in the costs of production, excluding labour and depreciation costs (known as input prices).

Key influences on the outputs index, which was up 1.7 percent in the March 2011 quarter, were the:

• 8.4 percent rise for dairy cattle farming, reflecting higher farm-gate milk prices 
• 9.8 percent rise for petroleum and coal product manufacturing, reflecting higher prices for petrol and diesel
• 4.6 percent rise for dairy product manufacturing, reflecting higher milk powder prices
• 8.5 percent rise for meat and meat product manufacturing, reflecting higher export prices for beef and lamb
• 7.3 percent rise for mining, reflecting higher export prices for crude oil.

Together, price rises for these five industries contributed about 61 percent of the overall 1.7 percent rise in output prices in the March 2011 quarter.

• Key influences on the inputs index, which was up 2.2 percent in the March 2011 quarter, were the:
• 7.3 percent rise for dairy product manufacturing, reflecting higher farm-gate milk prices
• 15.7 percent rise for petroleum and coal product manufacturing, reflecting higher prices for imported crude oil.

Together, the dairy product manufacturing index and the petroleum and coal product manufacturing index contributed about 43 percent of the overall 2.2 percent rise in input prices in the March 2011 quarter.

Output prices increased 4.2 percent overall in the year to the March 2011 quarter, while input prices were up 5.3 percent.

Geoff Bascand 18 May 2011

Government Statistician