Milk powder prices have continued to climb higher in the last week and are underpinning healthy global dairy markets. At this week’s GDT auction in New Zealand, average milk powder prices rose to their highest level in years.

Whole milk powder (WMP) prices gained more than 2% at this week’s event to hit $3,320/t (€/t) – its highest level in three years. At the same time, average prices for skimmed milk powder (SMP) jumped more than 3% to break the $3,000/t (€2,730/t) mark. Again this is the highest price level for SMP in over five years.

Butter prices eased slightly (-1.3%) this week to just over $4,000/t (€3,670/t), while cheddar prices gained 2.5% to reach $3,700/t (€3,350/t).

This trend is reflected in Europe, where milk powder prices continue to rally. Spot prices reported to the Dutch dairy board this week show that European SMP prices have risen to €2,530/t. European butter prices are flat at €3,550/t, while cheddar prices are also steady at €3,000/t.

Meanwhile, milk production has begun to rise in Europe. For October, milk production from Dutch dairy farms stood at just under 1.1bn litres, which is up 2%, or more than 20m litres, on the same month last year.

In Germany and France, September milk collections were up 1.3% and 1% respectively.

In contrast, New Zealand milk production for October, which is the peak month for milk supply in the southern hemisphere, was down almost 3% on last year at 3.1bn litres. New Zealand milk supplies are back almost 1%, or 50m litres, for the first five months of the 2019/20 milking season.