This week’s GDT auction was interesting on a number of fronts. Firstly, the average selling price of whole milk powder (WMP), which accounts for half of all product sold at the auction, saw prices increase more than 5% to $3,233/t. This is the fourth consecutive rise in WMP prices at the benchmark dairy index amid concerns from buyers that recent storms to hit the north island of New Zealand have left grazing conditions in poor order.

Given that New Zealand is approaching the end of its milking season later this month, it’s difficult to reason how poor weather at this late stage of the year could have much of an effect on global supply.

Secondly, and in complete contrast, the average selling price of skim milk powder (SMP) was back in the red at this week’s auction, with prices down 1% to $1,982/t. Despite the general improvement in dairy markets in the back half of 2016, SMP prices are only marginally higher than this time last year.

Prices for SMP continue to be dogged by the EU’s intervention stocks, which are overhanging the market. The contrasting fortunes of WMP and SMP prices means the premium between both commodities is at its highest ever level since GDT records began in 2010 at €1,250/t.

Milk powders aside, this week’s GDT saw strong gains for butter milk powder (+22%), casein (+10%), cheddar (+5%) and anhydrous milk fat (+5%). Overall, the GDT index increased 3.6%, which is the fourth consecutive rise since early March.