Dairy product prices rose at the Global Dairy Trade auction, increasing for the eighth consecutive time, as dry weather conditions are weighing on supply.
Within the past month Fonterra Cooperative Group has downgraded its milk collection forecast for the current season twice while it has increased its forecast payout to farmers.
The GDT price index gained 1.9 per cent from the previous auction two weeks ago.
The average price was US$3,324 a tonne, compared with US$3,309 a tonne two weeks ago.
Some 21,713 tonnes of product was sold, down from 23,930 tonnes two weeks ago.
Whole milk powder climbed 4 per cent to US$3,317 a tonne.
"The data supports Fonterra's recent upgrade to its current season milk payout and sets the scene for an even stronger payout for the 2019-20 season," Bank of New Zealand senior markets strategist Jason Wong said in a note.
At the latest GDT auction, rennet casein jumped 9.7 per cent to US$6,190 a tonne, while butter rallied 9.3 per cent to US$5,089 a tonne.
Cheddar climbed 3.9 per cent to US$4,036 a tonne.
Meanwhile, anhydrous milk fat dropped 3.1 per cent to US$5,662 a tonne, while skim milk powder declined 2.4 per cent to US$2,405 a tonne, and lactose fell 1 per cent to US$1,000 a tonne.
Butter milk powder was not offered at this event.
For sweet whey powder, no product was offered or sold, or no price was published for the last event, or on both of the two previous events.
The New Zealand dollar last traded at 68.59 US cents as of 2.54pm in New York, compared with 68.53 US cents at the previous close in Wellington.
There were 112 winning bidders out of 174 participating at the 14-round auction.
The number of registered bidders was 518, up from 516 at the previous auction.