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Livestock Prices Drive Fall in Farm Expenses

Farm input prices including livestock fell by 1.3 percent in the June 2003 quarter, according to Statistics New Zealand. Farm input prices excluding livestock fell 0.1 percent in the same quarter, while in the year to the June 2003 quarter, the Farm Expenses Price Index fell 1.7 percent.

The most significant contribution to the fall in farm input prices in the June 2003 quarter came from an 8.2 percent decrease in the livestock purchases index, influenced by lower prices for cattle, sheep and deer. Further downward contributions came from the fuel index (down 10.9 percent) reflecting lower world prices for diesel, and the index for interest rates (down 1.5 percent), which decreased due to competitive market rates.

The overall decrease in farm input prices in the June 2003 quarter was partially offset by a 13.4 percent increase in the electricity index, which was mainly influenced by higher energy and network costs. Farm input prices were further offset by an increase of 2.9 percent in the packaging costs index, reflecting higher labour and material costs; and the insurance premium index, which rose 4.3 percent in the June 2003 quarter.

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