Producer prices rise in December quarter

Producers’ output and input prices rose in the December 2010 quarter, Statistics New Zealand said today. Both indexes were influenced by higher wholesale trade, livestock, and farm-gate milk 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 0.2 percent in the December 2010 quarter, were the:

• 1.7 percent rise for wholesale trade, reflecting higher wool and metal prices
• 4.4 percent rise for livestock and cropping farming, reflecting higher prices for wool, sheep, and lamb
• 4.3 percent rise for dairy cattle farming, reflecting higher farm-gate milk prices
• 6.1 percent fall for dairy product manufacturing, reflecting lower milk powder and cheese prices.
• Key influences on the inputs index, which was up 0.9 percent in the December 2010 quarter, were the:
• 3.3 percent rise for wholesale trade, reflecting higher prices for gas condensate and imported crude oil 
• 3.4 percent rise for dairy product manufacturing, reflecting higher farm-gate milk prices
• 1.0 percent rise in agriculture, forestry, and fishing, reflecting higher livestock sheep prices.

Together, the wholesale trade index, the dairy product manufacturing index, and the agriculture, forestry, and fishing index contributed about 70 percent of the overall 0.9 percent rise for the inputs index in the December 2010 quarter.

Output prices increased 4.3 percent overall in the year to the December 2010 quarter, while input prices were up 4.4 percent.

Geoff Bascand 17 February 2011

Government Statistician