Global dairy prices have hit their highest level in eight years.
Photo: Global Dairy Trade
The average price at the fortnightly global dairy auction rose 4.2 percent to US$4840 per tonne (NZ$7294), after rising 4.1 percent in the previous auction.
The price of whole milk powder, which strongly influences the payouts for local farmers, was 4.2 percent higher to US$4503 a tonne.
Prices for other products sold, including butter, cheddar and skim milk powder, also increased.
"There is little doubt that this result will keep the global market in a frenzy, and will see futures and milk price forecasts pushed higher, yet again," NZX dairy manager Stu Davidson said.
He said it was "impressive" to have three consecutive auctions where dairy prices rose four percent higher each time, resulting in a cumulative gain of 13.5 percent in the GDT price over the past six weeks.
"Wholemilk powder's price point is now at similar levels to where it was in mid-2013, eclipsing the massive result made in March 2021, for all contract periods sold at this event; whereas the last event only one contract period was near this price point."
Adding to this was the current market expectation for prices to continue to push higher, Davidson said.
In the past month, dairy companies Fonterra and Synlait Milk have raised their forecast payout to farmers for the current season to record highs around $9.20 per kilogram of milk solids, as global demand outstrips supply.