NZX dairy futures whole milk futures have broken through the US$3000/tonne level for the first time in more than a year, putting upward pressure on Fonterra's farmgate milk price forecast.
The US$3000 a tonne level is generally regarded as the break-even point for farmers, although adverse currency movements can hinder beneficial price movements.
"When you see US$3000 a tonne it is certainly a good indication," AGriHQ dairy analyst Susan Kilsby said.
Fonterra's current farmgate milk price stands at $4.25 a kg of milksolids - short of DairyNZ's $5.05 per kg estimated break even point.
Physical dairy market prices have strengthened considerably after the last two very strong GlobalyDairyTrade (GDT) events.