Bakers prefer butter, helping prices soar
Consumers around the world are willing to pay more for products containing dairy and this is driving demand for butter and cream, says Fonterra.
After adjusting for seasonal effects, the volume of total manufacturing sales rose 2.8% in the June 2016 quarter, with meat and dairy product manufacturing volumes rising 8.6%.
"This quarter's large rise in meat and dairy manufacturing sales followed a sizeable fall in the March 2016 quarter," business indicators manager Tehseen Islam says.
"Despite some large movements in recent quarters, the sales volumes for meat and dairy have increased just slightly from where they were in early 2014," Islam says. "This contrasts with the sales values, which have dropped significantly since then, mainly due to falling dairy prices."
Dairy manufacturing prices were 33% lower in the June 2016 quarter than in the March 2014 quarter, while meat manufacturing prices were 4.2% higher.
The trend for the meat and dairy product manufacturing sales value (which includes price effects) has fallen 20% since a series high in the March 2014 quarter, while the volume trend has risen 3.2% over the same period.
Outside meat and dairy, the sales volume rose in most other manufacturing industries in the June 2016 quarter, with notable rises in industries supplying products to the construction sector. Petroleum and coal product manufacturing had the largest fall in the latest quarter, following large rises in the previous two quarters.
The sales volume for total manufacturing excluding meat and dairy was up 1.4% in the June 2016 quarter.
