Dairy product prices for manufacturers up 8.7 percent

milk powder stock image

Prices received by manufacturers of butter, cheese, and milk powder rose 8.7 percent in the June 2019 quarter compared with the March 2019 quarter, after falls in the previous two quarters, Stats NZ said.

Dairy product manufacturers received higher prices for products such as butter, cheese, and milk powder in the June 2019 quarter. Together, output prices for this group of products increased 8.7 percent from the previous quarter, the biggest rise in over two years. Prices rose by 16 percent in the March 2017 quarter.

“The rise in prices dairy product manufacturers receive is consistent with global dairy auction prices increasing in late 2018 and early 2019,” prices, accommodation, and construction statistics manager Melissa McKenzie said.

“It can take time for prices set at global dairy auctions to flow through to producers’ prices, and there can be a further lag before consumers see price changes.”

Dairy cattle farmers saw a relatively small change in the prices received for their raw milk, increasing by 0.5 percent for the June 2019 quarter. However, at the same time their input costs have decreased by 0.3 percent.

The farm expenses price index also shows a small decrease for dairy farm input prices (down 0.2 percent) for the June 2019 quarter. Some of the major input costs for dairy farmers have decreased with fertiliser down 1.2 percent, livestock feed (including maize, hay, and silage harvesting) down 4.4 percent, and interest rates down 1.3 percent.

Increased output prices for most other food manufacturers

Meat and meat product manufacturers also experienced higher prices for their goods in the June 2019 quarter, up 3.5 percent, compared with the March 2019 quarter. This is consistent with the recent rise in consumer prices for meat products.

Producers involved in seafood processing (up 1.8 percent); fruit, oil, and cereal manufacturing (up 0.7 percent); and beverage and tobacco product manufacturing (up 1.8 percent) all also experienced increases in the prices they received for their goods in the June 2019 quarter.

Source: DairyNZ

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