Ths morning’s gain was the third consecutive increase since prices started their decline in May last year.
Prices increased across the board, which was partially due to a decline in offer volumes for all commodities at this event, NZX dairy analyst Robert Gibson said.
Whole milk powder prices, which have the greatest bearing on Fonterra’s farmgate milk price, firmed by 1.2 per cent to US$2705 a tonne from the previous event late last year, while the GDT price index gained by 2.8 per cent.
Skim milk powder prices firmed by 7.9 per cent to US$2201 a tonne, rennet casein by 1.3 per cent US$5123/tonne, lactose by 1.6 per cent to US$948/tonne, butter by 3.9 per cent/$4076/tonne, butter milk powder by 9.3 per cent to US$3252/tonne, cheddar by 3.2 per cent to $3371/tonne and anhydrous milk fat by 3.9 per cent to US$5137/tonne.
The gains were despite a big pickup in domestic production, which was cited as a factor for price weakness last year.
According to the latest available data, New Zealand milk production rose by 2.3 per cent on a milksolids basis in November against November 2017.
Season-to-date production was up 4.9 per cent and by 0.8 per cent for the 12-months to November, also on a milksolids basis.
Dairy co-op Fonterra last month revised down its to a range from $6.00 to $6.30 per kg of milk solids from a previous forecast of $6.25-$6.50 per kg.
The revision was due to the global milk supply remaining stronger relative to demand, which has driven a downward trend on the GlobalDairyTrade index since May, Fonterra said then.
The co-op has maintained its collections forecast at 1,550 million kgMS for 2018/19 and has said an abnormal El Nino weather pattern over summer this could still impact on production.