New Zealand’s 3rd-Quarter Producer Input Prices Fall (Update1)

Nov. 16 (Bloomberg) -- Prices paid by New Zealand farms, factories and other producers for commodities and services needed to run their businesses fell in the third quarter, led by lower milk and power prices.

Producer input prices declined 1.1 percent from the second quarter when they were unchanged, Statistics New Zealand said in Wellington today. From a year earlier, input prices dropped a record 5.8 percent.

Prices paid by dairy companies for milk fell 21 percent, the largest decline in seven years, today’s report showed. Payments for milk are recorded only once a year, in the third quarter, the statistics agency said.

Prices paid by power companies dropped 8.2 percent because of higher inflows to hydro storage lakes and cheaper natural gas, the agency said. Steel prices fell, reflecting the stronger New Zealand dollar which made imports cheaper, it said.

The annual decline in input prices was led by a 32 percent slump in electricity costs and cheaper crude oil.

Producer output prices, which are paid to factories, farms and other producers, fell 1.4 percent from the second quarter, the third straight decline, the agency said. From a year ago, output prices dropped 2.1 percent.

Prices received by dairy farmers slumped by a record 24 percent. Prices received by dairy companies declined 11 percent as exported butter, cheese and milk powder fell. Lower fees for refining gasoline and weaker prices for imported fertilizer also contributed to the decline.