Firmer prices on the NZX Dairy Futures market were also a factor.
The AgriHQ milk price is now just a cent below Fonterra’s forecast price of $4.15/kg MS.
“It wasn’t a total surprise to see milk powder trading at higher prices on GDT as the NZX Dairy Futures market indicated a price improvement was likely.
“Futures prices indicated whole milk powder (WMP) prices could lift by about 6%, which was incredibly close to the actual price movement at last night’s event.”
The GDT WMP price index gained 5.5% with gains recorded across all contract periods.
“While this result is great news for New Zealand’s dairy farmers, a sustained price recovery is likely to be some way off.
“Overall market sentiment still remains very bearish as global milk production is still expanded and stocks of dairy commodities are building,” Kilsby said.
“China is a bright spot because it is expected to import a little more milk powder this year because imported product is substantially cheaper than producing milk in China.
“But China alone is unlikely to soak up all the excess milk that will become available this year hence a sustained price recovery is not expected to happen quickly.”
Average sales price for all products at the auction rose US$18 to US$2253/t.
Price movements were mixed with most of the gains being driven by the lift in WMP and supported by higher prices for skim milk powder, lactose and rennet casein.
The price index for SMP gained 1.3%, with lactose up 7.9% and rennet casein posting the largest gain at 14.9%.
Prices for milk fat based products dropped. The price index for anhydrous milk fat dropped by 8.3% while the butter index lost 0.5%. Cheddar prices were weaker by 0.7%.
