Dairy product prices climbed at the Global Dairy Trade auction, advancing for the sixth time in seven auctions, bolstered by a jump in whole milk powder amid lower supply.
The GDT price index jumped 11.4% to $US3327, up from $US2965 at the previous auction two weeks ago. Some 27735 tonnes of product was sold, down from 31,525 tonnes at the previous auction.
Whole milk powder soared 19.8 % to $US3317 a tonne.
Last week Fonterra said it reduced its forecast milk volume for the 2016-17 season in New Zealand to 1460 million kilogram of milk solids, 6.8 % below the volume collected last season, AgriHQ dairy analyst Susan Kilsby said in a note.
"Dairy markets reacted sharply to tightening milk supply in New Zealand," Kilsby said. "This positive GDT result will put upward pressure on milk price forecasts."
At the latest GDT auction, skim milk powder rallied 6.5 % to $US2,329 a tonne, while butter gained 4 % to $US4,146 a tonne.
Anhydrous milk fat increased 2.6 % to $US5,146 a tonne, while cheddar added 0.9 % to $US3,332 a tonne.
Meanwhile, lactose dropped 4.0 % to $US755 a tonne, while rennet casein fell 4.8 % to $US6025 a tonne, and butter milk powder declined 5.4 % to $US2248 a tonne.
There were 107 winning bidders out of 166 participating at the 17-round auction. The number of qualified bidders dropped to 510, down from 620 at the previous auction.
