Global dairy prices set record highs at the Global Dairy Trade auction on Tuesday night.
Overall prices took another big leap with the GDT price index up 5.1 per cent, pushing the average price to a record $US5065 a tonne.
Cheddar and butter also set new records.
The result builds on the three previous auctions that posted gains above 4pc.
Cheddar prices led the price rise, up 10.9pc to $US6394 a tonne, while butter posted a 5.9pc increase to break the $US7000 a tonne price barrier for the first time.
ASB economist Nathaniel Keall said the gains in the auction this year had been broad-based and substantial.
"In a pattern that is becoming familiar each auction, gains were spread across all product categories, with both powders and fats advancing by similar magnitudes," he said.
Westpac industry economist Paul Clark said unfavourable weather conditions and adverse geopolitical events were supporting price gains.
Production in New Zealand was weak due to poor weather, while bad weather and rising input costs were putting a lid on production in the European Union and United States.
READ MORE: Dairy outlook positive but pressure remains
Mr Keall said tight supply remained a big theme.
"The usual dairy cycle dynamic sees high dairy prices eventually trigger a supply response that in turn helps to push dairy prices back down again," he said.
"Yet adverse weather conditions locally and constraints on production overseas mean that the supply response has failed to materialise thus far."
Mr Clark said the Russia-Ukraine conflict was not expected to weigh on world dairy prices, and if anything could push them higher.
"That's a notable contrast to the Crimean invasion in 2014, when Russia placed a ban on food imports from countries that had placed sanctions on it," he said.
This meant several major food exporters had to find other markets for their product, pushing down prices.
"Russia has never removed that import ban, which means that it lacks any additional leverage over food-exporting nations this time," he said.
But the conflict was likely to hit input costs.
"Fears of supply disruptions have seen feed and fertiliser prices spike higher, adding to the pressure on already constrained production levels," he said.
"This should further support world dairy prices in the near term."
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