Dairy products push up producer prices

Producers’ output and input prices rose in the March 2010 quarter, Statistics New Zealand said today. Both indexes were strongly influenced by higher prices for diary products, electricity, and wholesale goods.

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 1.8 percent in the March 2010 quarter, were:

a 29.6 percent increase for dairy product manufacturing, reflecting higher export prices
a 1.6 percent rise for wholesale trade, reflecting higher petrol prices
a 4.8 percent rise for electricity generation and supply, driven by higher demand and low lake levels.

The increase for dairy product manufacturing is the largest since the series began in the June 1994 quarter.

Together, the dairy product manufacturing, wholesale trade, and electricity generation and supply indexes contributed two-thirds of the overall 1.8 percent increase in the outputs index.

Key influences on the inputs index, which was up 1.3 percent in the March 2010 quarter, were:

a 16.2 percent rise for electricity generation and supply
a 6.5 percent rise for dairy product manufacturing, reflecting higher farm-gate milk prices
a 1.8 percent increase for wholesale trade, reflecting higher imported crude oil prices.

Output prices fell 0.5 percent overall in the year to the March 2010 quarter, while input prices rose 0.6 percent.