Whether you’re quoting European or New Zealand prices, dairy markets on both sides of the globe are only travelling in one direction.
With New Zealand milk supply beginning to wind down as the autumn months approach in the southern hemisphere and European milk flows lower due to cold weather conditions, the fundamentals on the supply side are all positive.
On the demand side, Asian buyers are showing no signs of diminished appetite for dairy imports, while dairy consumption in Europe is very strong thanks to soaring retail demand for staples such as milk, butter and cheese. Additionally, bumper growth for sales of chocolate and confectionary is boosting demand for commodity milk and skimmed milk powder (SMP).
In New Zealand, the benchmark GDT index recorded its seventh consecutive positive result, with average dairy prices rising 3% at this week’s auction.
This week’s GDT auction was led higher by a more than 4% increase in the price of whole milk powder (WMP) to €3,000/t. WMP is by far the most important dairy commodity traded on the GDT.
SMP prices were flat at €2,660/t, while butter and cheddar prices increased 2% to €4,250/t and €3,540/t respectively.
Closer to home, European dairy markets saw price increases across the board for the main commodities. Butter prices increased to €3,600/t, while cheddar prices increased to €3,250/t and mozzarella prices rose to €2,800/t.
On the milk powder side, European SMP increased to just under €2,400/t, while WMP moved above €2,900/t.