The average price on Fonterra’s Global Dairy Trade auction has hit more than $5,000/t (£3,021) for the first time.

Dairy product prices averaged $5,025 (£3,036) at the last fortnightly sale, held on 21 January.

The maximum total amount offered at auction continued its steady decline since the start of December, dropping 5,618m tonnes from 7 January to 41,338m tonnes.

Average prices for butter increased 10.8% from the last sale, while those for cheddar rose 10.4% and milk protein concentrate was up 7.2%.

Skim milk powder and whole milk powder prices remained relatively flat.

AHDB dairy analyst Luke Crossman said wholesale prices were performing well, even as the amount offered to auction declined, which suggested a high level of demand.

“New Zealand is coming towards its trough at the moment, so there will be less product being made as a whole,” he said.

“Because of recent events in China they are buying up a lot of powder. There is potential for some product to be moved away from the auction, because wholesale prices are quite strong.”

Arla Foods did not offer any skim milk powder processed at Westbury, Wiltshire, at this auction, after it offered British product at the auction for the first time on 17 December.

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