By Lucy Craymer
Prices for goods and services used by New Zealand's producers, or input prices, continued to rise in the first quarter, while output prices fell due to lower international commodity prices.
Statistics New Zealand said Thursday that input prices, measured by its producer price index, rose 0.3% in the first quarter from the fourth, when they rose 0.5% on the quarter.
Output prices, or prices for goods and services produced in New Zealand, fell 0.1% from the fourth quarter, when they rose 0.1%. This is the first time the index has fallen since the fourth quarter of 2009.
"Manufacturers received lower prices for products such as meat, dairy, pulp and paper due to lower international prices and a higher New Zealand dollar. This flowed through to lower prices paid to farmers for sheep, beef and milk," Statistics New Zealand said in a statement.
The agricultural sector is the back bone of New Zealand's economy, with dairy the country's primary export. Milk powder prices have fallen sharply since their peak in early 2011 and are now down 41%, according to data from the GlobalDairyTrade twice monthly auctions.
Even as commodity prices have fallen, farm expenses have risen. Statistics New Zealand's farm expenses price index, which is only released for the March quarter, registered a 6.7% rise in farm expenses on the first quarter of 2011, with the cost for livestock up 28.8% over the same period.
-By Lucy Craymer, Dow Jones Newswires; +64-4-471-5990; email@example.com