Prices in the latest Global Dairy Trade auction, held overnight, have landed firmly on the side of dairy farmers, with a 2.2 per cent increase across the board.
Crucially, whole milk powder - which has the biggest influence on Fonterra's farmgate milk price - lifted 1.5 per cent to an average US$3803/MT, following a 0.4 per cent decline at the previous auction.
Meanwhile skim milk powder - Fonterra's second biggest reference product - gained 2.5 per cent to an average US$3401, a further boost from the 0.5 per cent lift last auction.
Leading the charge in the other reference products, lactose rose 5.9 per cent to an average US$1258/MT, but with very little product traded.
Butter increased 4.7 per cent to an average US$5111/MT, while cheddar was up 2.9 per cent with an average US$4426/MT.
Anhydrous milk fat rose 2.5 per cent to an average US$6151/MT.
Butter milk powder, sweet whey powder and rennet casein were not offered at this event.
On May 26, Fonterra announced an opening forecast Farmgate Milk Price range for the 2021/22 season of $7.25 - $8.75 per kgMS, with a midpoint of $8 per kgMS.
This remained unchanged when Fonterra released their annual results last month.
The result was "really positive," Fonterra chief executive Miles Hurrell said.
"I think farmers should be really comfortable with that," he told The Country's Jamie Mackay.
Global demand was up which was also a plus.
"To see $150, $160-odd million of product sold in the space of a couple of hours was pretty impressive."
Fonterra continued to be in a "pretty good space" with shipping, due to its partnership with Kotahi, Hurrell said.
However, global supply chain issues meant Fonterra was working "around the clock" to make sure things ran smoothly.
Hurrell thought shipping challenges would be a fact of life for a while longer.
"I wouldn't get excited about the end in sight for the supply chain in the near term, we've still got a few months ahead of us."
Also in today's interview: Hurrell talked about what contingency plans the co-op had if Covid came to the cowshed.