Prices have risen yet again in the latest Global Dairy Trade auction held overnight, with a 4.4 per cent lift across the board - which will be well-received on farms across New Zealand as the season nears its peak. 

It is the third significant increase in a row, with the index gaining 2.7 per cent on September 5 and 4.6 per cent on September 19. 

Whole milk powder rose 4.8 per cent to an average of US$2931/MT – over US$130 more than two weeks ago. 

Skim milk powder - Fonterra’s second-biggest reference product – experienced the biggest increase, up 6.6 per cent to an average of US$2558/MT. 

This is on the back of a 5.4 per cent increase two weeks ago. 

The biggest percentage fall came from cheddar, which plunged 4.8 per cent to an average of US$3853/MT, after a 1.4 per cent drop last time. 

Anhydrous milk fat lifted 3.7 per cent with an average of US$4979/MT. 

Butter followed suit with a 1.3 per cent increase, to an average of US$4806/MT. 

Butter milk powder finished up a slight 0.6 per cent to an average of US$2245/MT, while lactose dropped 1.3 per cent to an average of US$594/MT. 

38,350MT of product was purchased by 114 successful bidders, compared to 37,366MT and 121 winning bidders last time. 

On August 18, Fonterra announced it expected to pay farmers between $6 and $7.50/kg milk solids in the 2023-2024 season, with a midpoint of $6.75. 

That was a downgrade on an already revised forecast announced two weeks previously of $6.25 to $7.75 a kilogram. 

NZX dairy analyst Alex Winning said that futures market pricing had pointed to lifts for both powders and both milkfats, all of which eventuated. 

“With US, EU, New Zealand, and South American milk production all beginning to feel the effects of increased costs and extreme weather patterns, supply is beginning to tighten on a number of commodities,” Winning said in a commentary. 

European buyers are increasingly purchasing skim milk powder on the GDT platform. 

“Cheddar continues to prove its volatility. However, with the direction of EU cheese prices, particularly out of Ireland, it is no shock that NZ cheddar prices are taking a hit,” she said. 

“Overall, however, New Zealand farmers will be happy with this result, with large volumes of the milk price affecting commodities all increasing overnight,” Winning said. 

ANZ, in a commentary, said the results were slightly softer than signalled by futures pricing, but indicated that there was sufficient demand to accommodate the volume of product on offer as the season approaches its peak.