A touch of relief for dairy farmers overnight as world dairy prices rose in the latest Global Dairy Trade auction.
The GDT index gained 6.6% since the last auction in mid-July.
Whole milk powder prices made even bigger gains, up 9.9% to US$2265 per metric tonne.
While this price is still short of the US$3000 per tonne needed to safely bail out struggling farmers, the price rise will give them a measure of confidence.
Other products on the increase included skim milk powder, up 2.1% to US$1965 per tonne and rennet casein prices lifted by 16.3% to US$2889 per tonne.
The NZ Herald reported that AgriHQ dairy analyst Susan Kilsby said dairy commodity markets were waking up to the fact that milk production is slowing across the globe.
"The majority of the extra milk produced in recent years has come from Europe - but output there is now being stemmed by low returns," she said.
Kilsby said there was still production growth in the US but that it was largely being met by increased domestic demand.
"It is excellent to see such a strong lift in dairy commodity prices this early in the season," she said. "New Zealand has a large volume of dairy product to trade in the coming months so it is important that these products achieve higher prices if returns to farmers are to lift," Kilsby said.
Federated Farmers was cautiously optimistic that the gains represented a turning point for falling milk prices.
Stuff.co.nz reported Federated Farmers dairy group chairman Andrew Hoggard saying “It's been painful but you hope it's the turning of a corner. There's still a lot of challenges and they won't magically go away with one GDT event. We need to see a good solid pattern of lifts to give us any certainty.”
On Tuesday, DairyNZ released figures showing that as a result of successful cost-cutting measures by farmers, average break-even prices had fallen to $5.05 per kilogram of milk solids for the 2016-2017 season, compared to $5.25 last season, and $5.77 the season before.