Westpac senior economist Anne Boniface has also punted on next season’s price of $7, up 25c from her previous estimate.
Concerns about the impact of recent dry weather on milk flow might have underpinned the most recent lift in prices.
Fonterra has reduced its milk production forecast from a 3% gain to 2%.
Some of the price increase seen in the past month might unwind when weather conditions normalise.
Boniface said a combination of lower milk output in the 2019-20 season and modest growth in Europe and the United States, steady demand from China and a lower New Zealand dollar should result in a lift in farmgate prices next season.
ASB senior rural economist Nathan Penny, who was the first analyst to suggest $7 next season, said his $6.25 forecast for this season is under review, with upside potential.
The latest GDT rise of 3.3% in the index and 6% in whole milk powder is consistent with Penny’s view a new up-cycle of dairy prices might have begun (Farmers Weekly, February 25).
But it is still early days and more price increases will be needed to confirm that new turn of events.
Anhydrous milk fat and butter rose 3.9% and 3.7% respectively, cheddar was up 6% and skim milk powder prices fell by 4.3%.
The dairy market has risen 24% since mid November and is now only about 1% below its twin peaks over the past 28 months.
Another modest rise at the second March auction could see the GDT index reach its highest point since mid 2014.
NZX dairy analyst Rob Gibson said his forecast milk price has increased to $6.51 after the GDT results. The spot price is a full 80c higher at $7.31, being the milk price that would result from all the season’s production being sold at latest GDT prices.
The Fonterra-owned GDT platform published is 10th annual report, on activities during 2018.
During the decade dairy products worth $23.8 billion were traded in of 226 auctions.
“We have progressively won the support of buyers, sellers and market commentators, earning our place as a trusted source of market-based reference prices and market-informing data,” director Eric Hansen said.
In 2019 a refreshed GDT events platform will be launched to take advantage of considerable increases in digital technology since 2008.
It will enhance the bidding experience for the more than 700 registered buyers from 88 countries.
