AMF rose 5.3% and butter 2.9%, bringing butter values on world markets back close to their all-time highs.
Lactose, the cheapest and less-frequently traded dairy commodity, gained 14.8% of US$687/tonne but it remains well below the sub-$1000 level of 11 months ago.
Cheddar was up 4.6%, skim milk powder 3.6%, rennet casein 3.1% and whole milk powder by 0.9%.
WMP prices were firm across the board and the average of US$3311/t was the same as prevailed in the market in May 2017, having gone as low as $2755 in December and risen 20% since.
That returning strength in WMP and milk fat has bolstered the Fonterra farmgate milk price of $6.55/kg MS and with only five weeks to the end of the milk supply season its payout prediction looks to be secure, perhaps conservative.
Rising world prices in the middle of the northern hemisphere spring are a very good sign, ASB rural economist Nathan Penny said.
“The squeeze is back on global butter prices, up 27% so far this year and well ahead of where they were this time last year.
“We anticipate butter prices will shatter last year’s records ($6000/t) over coming months.
“This expectation is based on the fact that NZ is the world’s leading butter exporter, exporting more than 1.5 times the amount of other leading dairy exporters combined.
“With this in mind it’s no coincidence that butter prices peaked last year during the period when NZ production and exports are at their weakest, ie over the NZ winter and early spring.
“All up, it still appears the world faces an ongoing shortage of milk fat.”
Penny suggested the strong prices towards the end of the NZ season create upside risk to the milk price forecast, which will be good news to farmers.
He also predicted a solid start to the new season, for which his prediction is $6.50.
The AgriHQ milk price forecast fore this season lifted 1c to $6.31.
The slight increase was a result of the lateness in the season, when bigger commodity price movements had only small effects on the farmgate payout.
Analyst Amy Castleton thinks the gap between her forecast and Fonterra’s might be partly explained by Fonterra having sold more product volumes earlier in the year, when prices were even better than now.
The NZX Dairy Derivatives market responded to the GDT results with small increases in futures prices for WMP, SMP and AMF.
Milk price futures also rose, to $6.60 for this season and $6.25 for next.
