Fonterra is increasing its forecast payout for the current season by 60 cents per kilo of milksolids. This means an average payout of around $1 million to its farmers shareholders.

Agriculture Minister David Carter has ruled out government intervention to keep milk prices down, saying high international prices will benefit the New Zealand economy.

Prices in Fonterra's latest online auction have been pushed to record levels but recent volatility means picking the top of the cycle is proving tricky.

Freeze comes a day after the Government ordered a review of whether the local market was working well for consumers.

The Chinese company that sparked a fierce national debate last year about foreign investment in farming is ploughing ahead with plans to export millions of cartons of UHT milk from New Zealand to China.

World dairy prices have continued to surge in Fonterra's latest online global dairy auction, rising 7.2 per cent overnight.

The ASA has upheld a complaint against a supermarket advertisement for A2 milk, saying the beneficial claims are not backed up by evidence.

The Government has turned down Hong Kong listed Natural Dairy NZ's controversial bid to buy the Crafar dairy farms from receivers in a deal thought to be worth about $200 million.

Helen Clark has angrily denied claims her government sent NZ non-combat engineers to Iraq over a Fonterra contract.