“The 1 cent price rise last month was demonstrably short of the market realities and just did not reflect the obvious buoyancy in markets,” said Mr Quain.
“This upward sentiment has been sustained over the month and, interestingly, Whole Milk Powder has now taken over Butter as the commodity in high demand.
"Dairy farmers are looking to 2017 with the expectation that prices will cover all costs of production dairy including their own labour for the first time in nearly two years.”
Mr Quain said farmers desperately needed money due to autumn cash-flow pressure after “a truly disastrous year for dairy farmers”.
He also said some 4,000 farmers in the Voluntary Milk Supply Reduction Scheme will not be paid until late January at the earliest.