Prices in the latest Global Dairy Trade auction have finally rebounded, recording a 4.0 per cent lift across the board in last night's event.
As the largest increase in six months, since a surprise 15 per cent spike on March 2, it will be very welcome news for farmers.
Whole milk powder - which has the biggest influence on Fonterra's farmgate milk price - rose 3.3 per cent to an average US$3691/MT, following a 1.5 per cent decline at the previous auction.
Meanwhile skim milk powder - Fonterra's second biggest reference product - rocketed up 7.3 per cent to an average US$3274/MT, a further gain from the 1.1 per cent lift last auction.
Butter firmed 3.7 per cent per cent to an average US$4948/MT, while cheddar followed close behind - up 3.6 per cent with an average US$4328/MT.
Anhydrous Milk Fat rose 3.1 per cent to an average US$5970/MT, and lactose climbed 6.4 per cent to an average US$1167/MT.
Butter Milk Powder rounded off a full sweep of positive results, up 3.0 per cent to an average US$3287/MT.
Sweet Whey Powder was not offered at this event.
The volume of product traded lifted from the previous event's total of 22,543 MT to 25,093 MT of product, sold to 114 successful bidders.
The strong result was in line with supply and demand dynamics, Fonterra's chief financial officer Marc Rivers told The Country's Jamie Mackay.
"Demand continues to be fairly steady, especially in China and Asia, in spite of some of the uncertainties here with Covid, which continues to make its way through the different markets at different speeds.
"But so far [that supply and demand] is staying in balance and I think that's supportive of prices."
Skim milk powder's success was reflective of the "stars aligning" between good product and steady demand from Asia, resulting in New Zealand now having a premium over the EU and US of around $250 a tonne, Rivers said.
While it was still early in the season, Fonterra was feeling "very comfortable" with its $8 per kgMS midpoint forecast farmgate milk price, Rivers said.
Also in today's interview: Rivers talked about how Fonterra's partnership with Kotahi had ensured a strong supply chain during the pandemic.