Dairy product prices rose at Fonterra's GlobalDairyTrade auction amid concern about a decline in New Zealand's supply following dry weather conditions.
The GDT price index rose 4.9 per cent from the previous auction two weeks ago. The average price was US$3310 ($NZ4634) a tonne. Some 23,319 tonnes of product was sold, down from 25,400 tonnes two weeks ago.
Whole milk powder climbed 5.1 per cent to $US3010 a tonne.
"This result follows Fonterra's release [on Tuesday] that its December milk collections were down 6 per cent year-on-year due to dry, hot conditions on-farm in New Zealand," Amy Castleton, AgriHQ dairy analyst, said in a note, adding that Fonterra is now forecasting milk collections 3 per cent behind those of last season.
"Buyers have not been paying much attention to New Zealand's dry conditions to date, as the effects of poor pasture production had not yet flowed through to milk production statistics," Ms Castleton said. "But this appears to have turned around at this week's GDT event."
At the latest GDT auction, butter jumped 8.8 per cent to $US4897 a tonne, while skim milk powder rallied 6.5 per cent to $US1818 a tonne.
Rennet casein gained 5.5 per cent to $US4709 a tonne, while cheddar increased 5.2 per cent to $US3486 a tonne.
Anhydrous milk fat rose 2.2 per cent to $US6547 a tonne, while lactose traded at $US397 a tonne.
Butter milk powder was not offered.
The New Zealand dollar last traded at US72.73 cents as of 12.04pm in New York, compared with US73c at the previous close in Wellington.
There were 129 winning bidders out of 200 participating at the 14-round auction. The number of qualified bidders edged up to 517, from 516 at the previous auction.