For the second consecutive auction, the GDT index has shown an increase – a result that will undoubtedly be welcomed by dairy farmers the world over.

During today’s (Tuesday) auction, the index increased by 10.9%, with gains for nearly every dairy commodity.

Butter milk powder led the way with a gain in price of 30%, while skim milk powder (+11.7%), anhydrous milk fat (+11.7%) and butter (+8.1%) all made strong improvements.

New Zealand’s flagship product, whole milk powder (WMP), continued to show upward momentum, recording a strong gain (+12.1%) for the second auction in a row.

Casein prices were up by 6.3% while cheddar prices improved by 4.7%. The only dairy commodity where prices were in negative territory was lactose – down by 4%.

Light at the end of the tunnel

While its early days still, and the GDT is just one market indicator, beleaguered dairy farmers will be relieved to finally be seeing some light at the end of the tunnel. Two lifts in the GDT index in the last fortnight, particularly amid a period of extreme uncertainty around the Chinese economy, should give heart to the industry.

And while volumes were low once again with just under 36,000t of product traded, the uplift in price will give confidence to processors and producers alike that some level of demand for dairy products may be returning.