ASB rural economist Nathan Penny said this month's severe weather had stymied a strong end to the New Zealand production season and might lead to a slow start to next season.
Thanks to Cyclone Cook following quickly in the wake of Cyclone Debbie, the country has been in storm mode for most of the past month.
"However, the saving grace for dairy is that it has come late in the season and the major dairying regions have escaped the worst of the production impacts," Penny said.
"That said, there is a silver lining to the lost dairy production - we now see upside to our $6/kg milk price forecast for this season.
"Moreover, the recent auction results reaffirm our $6.75/kg forecast for next season as well," he said.
Fonterra's current milk price forecast still stands at $6/kg.
A large volume of instant WMP sold at a lower price than the regular grade product, AgriHQ dairy analyst Susan Kilsby said in a note.
"It was unusual to see regular grade WMP selling at a premium to the higher specification product but we have seen a lot of strength in the futures market recently and it is the regular grade product this market settles against," said Kilsby.
Skim milk powder (SMP) jumped 7.1 per cent to US$2044 a tonne.
"The GDT prices indicate there are buyers that are prepared to pay a premium to source SMP produced in New Zealand," Kilsby noted.
"Elsewhere in the world there is a glut of SMP but here we are successfully moving product and attaining good prices."
Cheddar rallied 6 per cent to US$3462 a tonne, butter increased 2.9 per cent to US$4892 a tonne, while lactose added 1.2 per cent to US$935 a tonne.
Meanwhile, rennet casein dropped 3.8 per cent to US$6020 a tonne, while anhydrous milk fat slipped 0.5 per cent to US$5930 a tonne.
Buttermilk powder sold at US$1720 a tonne.
There were 130 winning bidders out of 173 participating at the 14-round auction.
The number of qualified bidders rose to 541, up from 537 at the previous auction.
Staff Reporter, BusinessDesk
