Dairy prices had a slight reprieve overnight on Tuesday as the overall index rose 0.4 per cent at the latest global dairy auction, but butter has softened dramatically.
The average price per tonne on the GlobalDairyTrade (GDT) index was US$3091 (NZ$3418), with the rise following four consecutive declines.
The auction comes before an expected revision in the Fonterra forecast farmgate payout on Thursday, with most analysts picking a cut from $6.75 per kilogram of milksolids to $6.50.
Federated Farmers dairy deputy chairman Wayne Langford said it was great to see a halt to the recent slides in prices.
Commenting on the recent Rabobank confidence survey, which showed dairy farmers among the least optimistic, Langford said that reflected uncertainty following the election, and the bout of hot, dry weather.
Most drama centred around the price of butter, which fell 11.1 per cent.
Cheddar was down 3.9 per cent, but New Zealand’s key export product, whole milk powder, was up 1.7 per cent.
‘‘As we head into summer it’s positive to see milk powder rising. Some easing of butter prices was expected after it had reached record highs,’’ Langford said.
Whole milk powder is the most important product traded on the GDT, accounting for more than 50 per cent sold, and is the usual benchmark for the price farmers are paid.
Other indexes showed largely positive moves, with skimmed milk powder in particular rising by 4.7 per cent, despite the large stocks held in European Union warehouses.