Change in price of inputs paid by the dairy cattle farming industry in New Zealand

The producers price index (PPI) measures changes in prices of outputs that generate operating income and inputs that incur operating expense. It measures changes in prices for the supply (output) and use (inputs) of goods and/or services by the productive sector. The PPI therefore does not include prices for items related to capitalised expenditure, non-operating income, financing costs, and employee compensation. It does not cover depreciation, or income related to property ownership when this is not the normal source of operating income.

Input indexes: measure changes in prices paid by producers for goods and services they use. Stats NZ apply weights and prices to goods and services used by New Zealand producers to present an input price index for each industry. Inputs can either be domestically supplied or imported.

http://datainfoplus.stats.govt.nz/Item/nz.govt.stats/3cad91a6-e3a2-4dca-bb77-52e11442a0bf#/nz.govt.stats/d2d8a745-9703-4979-be00-c9af5c4d8240/5#

The accuracy of price indexes varies depending on the particular characteristics of each index. The nature of the commodities being measured is a factor affecting accuracy as some items are easier to price on a consistent basis than others. Services are known to be particularly problematic. Both the level and quality of output are often difficult to accurately identify and price. Furthermore, the level of disaggregation may affect quality, with indexes at a lower level generally having more variability than indexes at a more aggregated level where volatility from sampling is smoothed out.
In general, an index’s accuracy depends on the nature of the commodity group or industry being measured, and the level within the hierarchy from which it is drawn. In most instances, customers make a trade-off between the level of detail contained in the index, and its statistical accuracy.

At URL provided, select 'Economic indicators > Producers Price Index - PPI > Inputs (ANZSIC06) - NZSIOC level 4, Base: Dec. 2010 quarter (=1000) (Qrtly-Mar/Jun/Sep/Dec)'. All variables were selected in order to create this dataset.
Figure.NZ has calculated the quarter-on-quarter percentage changes and the year-on-year percentage changes based on the index provided by Stats NZ.

The primary purpose of the PPI is for use by Stats NZ as deflators in calculating gross domestic product (GDP), which is New Zealand’s official measure of economic growth. These deflators remove the effect of price change so the change in the volume of goods and services produced in the economy can be measured. For this reason, the current PPI aligns closely with the System of National Accounts 2008 (SNA08).
Other uses for the PPI include short-term indicators of producer inflationary trends, and in contract indexation clauses (also known as contract escalation).