Milk prices reached their highest level in more than three years at United Dairy Farmers‘ latest auction, at an average of 29.16p/litre for February delivery. That was 2.18p/litre higher than last month’s auction, and 5.11p/litre higher than the same time last year.

At 44m litres, the volume of milk sold was again high, reflecting the resurgence in Northern Ireland’s milk supplies, said a report by DairyCo. “The higher price reflects greater optimism about the prospects for commodity markets in the coming months.”

Fonterra‘s latest auction saw whole milk powder values reach their highest level for more than seven months, with buyers competing to secure supply as drought in New Zealand curbed production. WMP prices for March delivery rose by 1.5%, with skimmed powder markets up by 5.6% – the fourth straight increase in a row. Fonterra said WMP supplies would drop by 1% due to drought.

European powder prices were also on the up, with bids for the EU sale of SMP intervention stocks higher than the previous tender, said DairyCo.