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Last week's GDT saw the overall price index fall a modest 0.7%.
The key category, whole milk powder (WMP), rose a touch, up 0.7%.
Westpac senior agri economist Nathan Penny says the result continues the sideways trend of the last few auctions.
"Both overall and WMP prices have recorded movements in either direction of less than 1% over the last three auctions," he notes.
"Accordingly, these results have cemented the bumper gains from early March."
The auction was also mixed by product. Four out of the seven products posted price falls. Notably, milk fat prices fell for the second successive auction, with butter prices sliding over 12%.
Heading the other way, butter milk powder (BMP) prices jumped over 14% while skim milk powder also lifted 2.0%. Penny says the result was largely in line with expectations.
ASB economist Nat Keall says the modest movement in WMP price masked some more dramatic price swings in the underlying products, mostly milk fat.
Keall believes there are a few drivers behind lower butter prices.
Butter has enjoyed a strong run, with prices averaging around US$5,200 since the beginning of the year, compared with an average closer to the US$4,000 mark over the auction history.
"A bit of reversion to the mean at this action coincided with higher volumes on offer, particularly for near-term contracts," he says.
"This supply response saw the market somewhat saturated, with volumes sold failing to meet offer volumes."
Keall syas the ongoing easing in restrictions overseas could mean demand for retail butter and cream may be on the downslope.
"Still, the key takeaway for farmers is that powders are maintaining their value.
"It's ultimately the WMP price that's most material for the farmgate milk price farmers can expect to receive, accounting for more than 60% of the overall product mix."
Keall says the WMP story last auction was "more of the same" - prices lifted further from their already-heady heights and prices were higher across the contract curve, with the exception of a tiny dip in the September contract.
Most importantly, prices for longer-dated contracts (including the November contract) are still trading at a premium over the nearer dates, suggesting demand remains resilient well into next season.
Keall says he sees further upside in their $7.50/kgMS forecast for 2021/22.
Penny agrees that the result means that global dairy prices remain on the front foot heading into the new dairy season. "Recall that we lifted our 2021/22 milk price forecast to $8.00/kgMS following the previous dairy auction," he says.
