Online bi-monthly auction, Global Dairy Trade rose 14.8 per cent overnight on the back of stronger futures sales and stronger competition from buyers.
It is the first time the dairy market has risen since the beginning of March.
Dairy Australia analyst John Droppert said the market may not be out of woods yet, because no one knew the amount of dairy product sitting in storage.
«The one that everyone is trying to have a stab at is how much inventory is out there,» he said.
«It’s going to take some time to clear out of the market.
«If we’re going to see a change in the market to where buyers believe there is a genuine shortage of product… we’re a long way away from that.
«But of course this is a step in the right direction.»
While the news is uplifting, there are still tough times ahead for New Zealand farmers, according to Wayne Langford, dairy industry group vice-chairman of Federated Farmers New Zealand.
«We are only just getting into the tough part.
«We worked our way through a low payout last year, but to carry on with not much pay from Fonterra and a bleak forecast, that’s the toughest part, it’s still yet to come really.
«There’s no doubt this season will be tough. In terms of returns to farmers during the milking season, I don’t think they’re going to be flash.»
Mr Langford was optimistic that global dairy prices would continue to rise in the coming months.
«Hopefully we can see a rise in global dairy prices, then come next winter we may see a slight lift in the pay that Fonterra announce, so hopefully that will help farmers get through next winter.»
Source: ABC