Dry weather throughout much of the country has driven up milk futures prices to close to $7.00 a kg for next season.
The NZX milk futures contract - designed to help farmers mitigate the risks associated with variable milk prices - has been steadily rising since January, when the dry weather started to set in.
Fonterra has forecast milk collection to fall to 1,510 million kg of milk solids for the current season due ongoing dry weather, particularly in the North Island.
The co-op's latest forecast is slightly above last season's collections of 1,505m kgMS - a season also impacted by poor on-farm conditions - and down from February's forecast of 1,530m kg.
The NZX's September 2020 milk price contract last traded at $6.80/kg, up from around $6.00/kg in January.