Global dairy prices have risen for the first time in three months.
The average price at the fortnightly sale rose 1.5 percent. Photo: RNZ / Rebekah Parsons-King
The average price at the fortnightly sale rose 1.5 percent to $US4656 a tonne, after falling 2.9 percent in the previous auction.
The price of wholemilk powder, which strongly influences the payouts for local farmers, was fractionally lower to $US4,158 a tonne.
"It would seem that dairy commodity prices have bounced, and the market is ready to push higher again," NZX dairy analyst Stu Davison said.
The increase was the first since the start of March and lifted the global dairy price index off its low point for the year.
The volumes sold were down by nearly 12 percent, which Davison said went nowhere near satisfying the demand evident in the auction, even with North Asian buyers, mainly Chinese, largely absent because of supply chain disruptions.
"My big take away from this event is the volume of demand on the auction, both butter and WMP (whole milk powder) opened the bidding with a high demand to supply ratio; much more product was demanded as was available."
"This is a great measure of the amount of demand that arrived at the auction, but at this time of the year, must be measured against the lower offer volumes. What is more impressive is that North Asian buyers were again obviously absent, but good support was registered," Davison said.
Prices for other products including butter and skim milk powder rose, but cheese eased.
The positive auction stemmed a 16 percent decline in auction prices since the start of March, and underpinned Fonterra's forecast of a record payout for the current season to a midpoint of $9.30 per kilogram of milk solids, and a preliminary forecast for the just started season of $9 in a range of $8.25 to $9.75.