Global dairy prices have hit a record high.
The previous price record for global dairy products was set in April 2013. Photo: 123rf
The average price at the fortnightly global dairy auction rose 5.1 percent to US$5065 a tonne, after rising 4.2 percent in the previous auction.
The Global Dairy Trade price index hit 1593, breaking the previous record of 1573 in April 2013.
The price of wholemilk powder, which strongly influences the payouts for local farmers, was up 5.7 percent to US$4757 a tonne.
Prices for other products sold were also up.
Butter was up 5.9 percent to US$7086 a tonne, skim milk powder was up 4.7 percent to $4481 a tonne and cheddar was up 10.9 percent to $6394 a tonne.
NZX dairy insights manager Stuart Davison said the result was surprising, even though he expected a good jump in prices.
"To back up three events of 4 percent plus GDT price index gains with a 5.1 percent price index gain is impressive.
"There is little doubt in my mind that the buy side of the market is now correctly pricing in the lack of milk supply, made very obvious by the multitude of market data points over the last two weeks," he said.
Davison said there was a strong showing again from all Asian buyers reinforcing the idea that the market remained supported and demand was strong.
African buyers were also "extremely" active, he said.
"As with each of the last three auctions, this magnitude of a GDT price gain will send everyone back to their milk price calculators, and will no doubt see some prices added to this season's forecast."
In the past month dairy companies have raised their forecast payout to farmers for the current season to record highs between $9.20 and $9.90 a kilo of milk solids.