Prices of dairy products staged the biggest gain in five months, pushing the average price to a two-month high, as rennet casein climbed to a record.

The GDT Price Index, previously known as the GDT-TWI Price Index, rose 3.9 per cent compared to the last sale two weeks ago. The average winning price was US$4,973 a tonne compared to US$4,805 a tonne.

The average winning price of rennet casein, a functional ingredient used in everything from sliced cheeses to products that can be whipped or foamed, jumped 18.9 per cent to $11,011 a tonne.

Whole milk powder, the biggest product by volume, rose 3.4 per cent to US$5,035 a tonne and skim milk powder rose 5.6 per cent to US$4,791 a tonne. Cheddar slipped 1.5 per cent to US$4,501 a tonne.

This week Fonterra chief executive Theo Spierings told unitholders of the Fonterra Shareholders' Fund that the high milk price paid to farmers was a reflection of "huge demand" for whole milk powder and other products used to calculate the milk price, while non-milk price products such as cheese and casein had lagged behind, widening the gap between Fonterra's raw material costs and returns from its value-added products.

See more about the overnight auction results here.


The total volume of dairy products sold at the latest GDT auction slipped to 51,944 tonnes from 52,297 tonnes in the previous auction.

The price of anhydrous milk fat rose 2.7 per cent to US$5,395 a tonne and butter rose 4.5 per cent to US$3,750 a tonne. Butter milk powder gained 4.6 per cent to US$4,630 a tonne.

Milk protein concentrate rose 5.9 per cent to US$8,242 a tonne and lactose climbed 6.1 per cent to US$1,730 a tonne.

There were 127 winning bidders over 16 rounds. There were 207 participating bidders out of a total number of qualified bidders of 831.