Dairy prices continued to rally higher this week, as the Global Dairy Trade (GDT) index posted a 1% rise in average dairy commodity prices. This week’s auction in New Zealand was led higher by gains in price for skimmed milk powder (SMP), butter and cheese.

Whole milk powder (WMP), which is the most important dairy commodity traded on the benchmark auction platform, was relatively flat at an average price of just over $3,000/t (€2,665/t). However, SMP prices jumped by almost 3% to hit $2,580/t (€2,275/t) as the recovery in SMP markets continues following the clearance of the European Commission’s intervention stocks.

On the fats side, butter prices increased 1% close to $4,500/t (€3,965/t), while anhydrous milk fat prices were also up 1% to $5,620/t (€5,000/t). Cheddar prices climbed 3% to reach $3,670/t (€3,235/t). Volumes sold on the GDT were low this week at just over 25,000t.

Closer to home, European spot markets present a mixed bag this week. On the powder side, WMP prices reported to the Dutch Dairy Board rose slightly to €2,950/t. SMP prices in Europe firmed once more this week close to the €2,000/t mark. However, European SMP prices still have a way to go to catch world market prices, which are almost €300/t higher.

Europe’s butter market continues to realign itself with world market prices after a volatile two years. Spot butter prices in Europe this week fell 3% in the week back to €4,170/t, which is around €200/t ahead of the global market price.