Prices have soared at the latest GlobalDairyTrade auction.
The GDT Price Index rose 12.7 percent to an average price of US$2,731.
That follows a rise of 6.6 percent at the previous auction two weeks ago.
Whole milk powder leapt 18.9 percent to an average price of US$2,695 per metric tonne.
It is New Zealand’s biggest dairy export product and a big influence on the payout to farmers.
Today's result exceeded expectations. The futures markets had suggested whole milk powder prices would rise by around ten percent today.
The result saw the New Zealand dollar rise from around 72.40 US cents before the auction to 72.70 cents by 5am.
Skim milk powder rose by three percent today to US$2,028.
The butter index leapt 14.1 percent to US$3,274.
Global dairy prices have been held back this year by a glut of supply, particularly from Europe.
But analysts say the supply of products like whole milk powder is easing. Production is down ten percent in the UK.
Fonterra is forecasting a payout of $4.25 per kilogram of milk solids for this season. But analysts believe that figure will be lifted later in the season.
Most farmers have a breakeven point of $5.05, according to Dairy NZ.