The GDT recorded its fourth consecutive increase this week, after the benchmark dairy index posted a 1.7% lift in average selling prices. The GDT has recorded strong growth since the start of August, but this week’s event was more subdued as the price of whole milk powder (WMP), the most important commodity traded on the GDT, saw a marginal decline (-0.2%) to just over $2,780/t.

This flat performance for WMP was offset by a 3% increase in the price of skimmed milk powder, which has now risen more than $300/t in the last month to just under $2,300/t.

Continuing the recent trend of greater demand for fats, there were further increases in the average selling price of butter (+4%), butter milk powder (+7%) and anhydrous milk fat (+5%). There were also increases in the average price of cheddar (+2%), lactose (+4%) and casein (+2%).

Just hours after this latest positive GDT result, New Zealand dairy co-op Fonterra announced a 50c increase in its forecast milk price for the 2016/17 milking season to $5.25/kg of milk solids (23.7c/litre).

This is the second time in less than a month that Fonterra has increased its milk price outlook for the year ahead after it raised its initial forecast from $4.25/kg to $4.75/kg last month.

Fonterra chair John Wilson said the co-op had reviewed its forecasted milk price upwards in response to falling milk production in the EU and New Zealand, combined with stable demand.