AMF gained 4.4% and butter 2.9% to set new records; AMF close to US$7000/tonne and butter results including two contract periods worth more than $6000.
Butter was up 115% on GDT prices in June 2016 and AMF was up 90%.
Lower milk production in Europe and strong demand for milk fat from developed markets had produced the outstanding prices, Rabobank dairy analyst Emma Higgins said.
Rabobank expected the spread between fats and protein to persist through 2017 though milk supplies were starting to increase again.
Chinese imports of whole milk powder were expected to increase 20% this year, which should keep world prices steady.
Fonterra was on track to sell 600,000 tonnes of its 2.5 million tonnes of New Zealand ingredients production this season through the GDT channel with China accounting for 45% of purchases.
Fonterra released its first forecast for NZ milk output in the 2017-18 season to be up 3%, after the previous season was down 3% (minus 4% in the North Island, steady in the South Island).
For Fonterra, Australian milk collection in the 11 months to the end of May was 116m kilograms, up 1%, compared with the country as a whole which was down 7% in the year to March.
The obvious conclusion was that Fonterra gained milk supply share, probably from the largest processor, Murray Goulburn.
The global dairy market outlook remained firm, ASB rural economist Nathan Penny said after the latest GDT auction.
“Moreover, with supply and demand in balance we expect prices to fluctuate around current levels over coming months.
“While global dairy markets can change rapidly, for now, a period of relative calm lies ahead,” Penny said.
Whole milk powder (WMP) prices dropped 3.3% and were now down 15% since the beginning of 2017.
But the outlook through the NZX Dairy Derivatives market was for stronger prices through the rest of the year, AgriHQ dairy analyst Amy Castleton said.
The AgriHQ milk price forecast rose six cents to $6.68/kg because of those WMP futures expectations and the very high butter and AMF physical market prices.
The GDT price index was down 0.8%, the first fall in the index since early March.
Meanwhile, the September 2018 milk price futures contract on the Derivatives market lost two cents after the GDT auction to sit at $6.48/kg, compared with the Fonterra forecast for 2017-18 of $6.50.
