The price of whole milk powder, which strongly influenced the payouts for local farmers, rose 3.4 percent to US$3463 a tonne. (file image) Photo: 123rf
Dairy prices saw the biggest jump in four months as demand for products continues to rebound.
The average price rose 4.2 percent at the overnight auction to US$3571 a tonne. It followed the 2.3 percent gain in the previous auction a fortnight ago.
The price of whole milk powder, which strongly influenced the payouts for local farmers, rose 3.4 percent to US$3463 a tonne.
Prices for most other products also rose, with butter rising more than 10 percent, to US$6516 a tonne.
Prices for most other products also rose, including cheddar and skim milk powder. However, prices for mozzarella fell.
Improved demand and prices have prompted local dairy companies to increase forecast payouts to average midpoints of $7.50 per kilogram of milk solids.
NZX dairy analyst Rosalind Crickett said the event saw "fierce bidding demand".
"The results of this auction comfortably surpassed most expectations going into it, with the NZX-SGX derivatives markets predicting flat to bearish results all-round," she said.
The Middle East maintained its position as the top buyer of whole milk powder, while North Asia was the top bidder for skim milk powder, butter and anhydrous milk fat and lactose, Crickett said.
"With ongoing tensions in the Red Sea leading to both increased shipping lead times and costs and production off season in the Northern Hemisphere, it will be interesting to see if this buying activity continues in the short-term."