Global dairy prices have lifted again, hinting a recovery may be underway.
The Global Dairy Trade price index was up 4.6 per cent at the September 21 event, the second consecutive lift.
Most commodities reported gains with skim milk powder leading the way, up 5.4pc.
Anhydrous milk was up 5.3pc, whole milk powder (WMP) 4.6pc and butter 3.8pc.
Only cheddar defined the trend, recording a 1.7pc decline.
ASB senior economist Chris Tennent-Brown said it was encouraging to see another sign that dairy prices might be finding a floor, but the bank remained cautious on the outlook.
Westpac New Zealand senior economist Nathan Penny agreed.
Despite the rise, it was too early to say prices had turned a corner.
"Indeed, the recent price rises may have more to do with the fact that low prices have brought buyers back to the market rather than any fundamental change or improvement in global dairy demand," he said.
Mr Tennent-Brown said it was pleasing to see a return of Chinese demand to the auction and a significant lift in the quantity of WMP bought by China.
"We still believe a sustained recovery in Chinese demand is a necessary precursor to a substantial recovery in prices," he said.
Mr Penny said although the price rise was welcome, WMP and overall prices are still down by 25pc and 24pc on the same time last year.
"With that in mind, it's difficult to judge yet whether prices have turned a corner," he said.
"To make that call we will need to see further price lifts over October and into November."
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Carlene Dowie
Carlene Dowie is the editor of the Australian Dairyfarmer magazine and has more than 30 years' experience as a rural journalist.
Carlene Dowie is the editor of the Australian Dairyfarmer magazine and has more than 30 years' experience as a rural journalist.
