Dairy prices increased 3.9 percent across the board in the first global auction of the year.
Whole Milk Powder – the most important product for New Zealand farmers – lifted 3.1 percent to $US3306 a tonne, to reach the highest level in 12 months.
Prices for other products sold were higher across the board, with strong rises for butter which was up by 7.2 percent to $US4526 a tonne and anhydrous milk fat which was up 5.5 percent to $US4604 per tonne.
ANZ agriculture economist Susan Kilsby said the results came as a great surprise.
“It’s a really positive start to the season for our farmers and it means the likelihood of the milk price being at the higher end of the range that Fonterra is currently forecasting, is much greater.”
Kilsby said it was not just dairy farmers who would benefit.
“It certainly does flow through, a lot of the spending in our rural communities is funded from incomes that come from dairy farmers so it definitely flows through to our rural communities. so it’s really positive that we’re seeing a good level of milk price there at the moment.”