United Dairy Farmers‘ 20 January auction achieved the highest monthly price for more than three years. A total of 44m litres was sold by the Northern Ireland milk co-op at an average price of 29.16p/litre. This is 2.18p/litre higher than last month’s auction and 5.11p/litre higher than in January last year.

The milk was only sold on one-month contracts, for delivery in February 2011, and the volume was more than many people had expected, said Matthew Johnson of DairyCo.

“The higher price in this month’s auction in part reflects greater optimism about the prospects for commodity markets in the coming months,” said DairyCo in its weekly briefing. “Powder prices moved up in Fonterra’s early January auction and they moved up again in this week’s auction.”

A recent EU tender sale of intervention skimmed milk powder stocks also attracted higher price bids than a fortnight earlier.