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Dairy product prices rose at the Global Dairy Trade auction, increasing for the first time in five auctions, amid expectations that dry weather conditions in New Zealand might ease milk production.
The GDT price index rose 0.4% from the previous auction two weeks ago to US$3,091. Some 29,514 tonnes of product was sold, down from 35,042 tonnes two weeks ago.
Whole milk powder gained 1.7 % to US$2,830 a tonne.
"The lower volume on offer appears to have provided some support as nearly all of this product was sold," Amy Castleton, AgriHQ dairy analyst, said in a note.
"Buyers may also be concerned about the dry conditions in New Zealan. Contracts for shipping in March and April saw the greatest support."
"New Zealand milk production has coped okay with adverse weather conditions to date, but continued dry conditions are likely to affect milk production through the summer months," Castleton added.
At the latest GDT auction, skim milk powder climbed 4.7% to US$1,774 a tonne, while butter milk powder gained 4.3% to US$1,957 a tonne.
Rennet casein added 3.4% to US$4,879 a tonne, while whole milk powder advanced 1.7% to US$2,830 a tonne.
Meanwhile, butter sank 11.1% to US$4,575 a tonne
"Butter was last at this price level in the early months of this year," Castleton said. "Butter prices have now declined for five consecutive events, and have lost 25% of their value since September."
Nearest dated contracts fell the most-prices for butter to ship in January dropped 24.3%, according to Castleton.
Cheddar fell 3.9% to US$3,696 a tonne, while anhydrous milk fat slipped 0.6 % to US$6,836 a tonne.
No prices were available for lactose.
There were 123 winning bidders out of 160 participating at the 13-round auction. The number of qualified bidders rose to 563, up from 557 at the previous auction.