Prices have risen in the latest global auction overnight to their highest level in nearly three years.
The average price increased 1.6 percent to $US4385 ($NZ7430) a tonne, the best since July 2022, after rising 1.1 percent rise in the previous auction two weeks ago.
NZX dairy analyst Rosalind Crickett said the “dairy bulls” had taken charge of the market and driven buying in an auction that was being closely followed.
“Prior bullish sentiment rang true in dairy markets overnight … Upward momentum in prices carried the index up this time from all product categories bar skim milk powder (SMP) and cheddar.”
She said the results were mostly in line with NZX expectations.
The price of wholemilk powder, which strongly influences the payouts for local farmers, increased 2.8 percent to $US4385 a tonne, the highest since mid-2022.
Crickett said milk production has fallen in China, which had prompted further buying of wholemilk powder, butter and cheese as businesses replenished stocks.
Strongest demand at the auction came from North and South East Asia buyers, who took more than half of the products on offer, with Europe taking about a quarter.
The strength of global prices has supported dairy company forecasts of record milk payouts in the soon-to-finish season of at least $10 per kilo of milk solids.
But high export prices have also underpinned high New Zealand domestic prices for a wide range of dairy products, with milk rising 16 percent and butter rising nearly 64 percent over the past year, according to latest Stats NZ data.
