Milk powder prices also crept up with whole milk powder (WMP) defying market expectations.
The NZX Dairy Derivatives market had picked a correction in the WMP price at last night's auction.
While the price for Contract 2 regular grade WMP fell by 2% the overall WMP Price index lifted by 1.3%.
The SMP price index came up 1% at last night's event supported by higher prices being achieved for product offered by European dairy company Arla, and better prices for the higher grade product offered by Fonterra. But in general SMP prices are still weak relative to the other dairy commodities.
The milkfat products were the star performers last night. The butter price index lifted a massive 11.2% while the price index for anhydrous milkfat (AMF) lifted 8.2%.
Butter and AMF prices have generally been trending up all season and show no signs of slowing down.
Strong demand for milkfat is put down to many consumers in developed nations eating more natural foods rather than artificial or processed foods. Some of the poorer nations are also developing a taste for butter. Cakes and cream are being consumed more often by wealthy Asians.
The world remains very short of milkfat products and NZ is the largest supplier of globally traded butter and AMF.
As we head towards the end of our milk production season the volume of product that is available for sale falls away which is supportive of prices.
Milk prices futures for the 2016-17 season closed yesterday at $6.09/kg milksolids (MS) while next season's contract was priced at $6.01/kg MS.
