Producer output prices rose 1.5 percent in the December 2016 quarter, and producer input prices rose 1.0 percent, Statistics New Zealand said today.

Producer output prices were mainly influenced by higher prices received by dairy product manufacturers (up 14 percent), and higher farm-gate milk prices received by dairy cattle farmers (up 13 percent).

"Producer prices were driven by a higher forecasted farm-gate milk price, which rose to $6.00 a kilo in mid-November 2016. This compares to $4.60 a kilo a year before, and $8.65 a kilo in the March 2014 quarter, when prices received by dairy cattle farmers were at their peak," business prices manager Sarah Williams said.