The price index increased 9.9% in yesterday’s GlobalDairyTrade auction.
That’s the fourth good increase in a row, a positive and welcome trend after the run of sharp falls.
Whole milk powder, which has the biggest impact on the farmgate price, increased by 12.9%.
Although Fonterra has been offering smaller quantities at the auctions it says it isn’t stockpiling product and that it isn’t selling product elsewhere for less than the auciton price.
Dairy futures are also positive and an increase in the forecast payout is expected.
Any improvement will be welcome but it will need to get above $6 before most farmers will make a surplus.