UPDATED 8.02AM Dairy prices have risen 4.5 per cent at Fonterra's latest GlobalDairyTrade auction

The average price was up to $US3519 ($NZ4965) per metric tonne with the important whole milk powder price up 3.2 per cent to $US3423.

Traders had been expecting a price rise of between 3 and 5 per cent.

Low global dairy prices have been hurting farmers but the GDT index has been on an upward trend since March this year and the rise was the seventh in the last eight auctions.

Last month Fonterra said it reduced its forecast milk volume for the 2016-17 season in New Zealand.

"Tightening milk supplies in both New Zealand and Australia has put pressure on suppliers with some dairy companies struggling to meet contracted delivery times," AgriHQ dairy analyst Susan Kilsby said.

"This has left a few buyers with low supplies on hand putting some urgency into the market."

All products on offer rose with butter milk powder jumping 13.3 per cent while cheddar climbed 11 per cent.

The New Zealand dollar last traded at 70.93 US cents at about 11.31am in New York, compared with 71.18 US cents at 5pm in Wellington the previous day.