On Tuesday morning this week, data from New Zealand (NZ) dairy industry body DCANZ showed October milk production in NZ stood at 3.2bn litres, which is a 6% rise on the same month last year.

October is the month of peak milk production in NZ and equivalent to May milk collections here in Ireland.

NZ farmers have made a very strong start to the 2018/19 milking season, with milk collections in the first five months of the season (June to October) up 5.8% on last year at 7.6bn litres.

In its simplest terms, this means an extra 415m litres of milk is washing around NZ compared with last year.

By Tuesday evening, another set of figures was coming out of NZ. However, these were far less bullish.

The GDT had just completed its latest auction and dairy commodity prices had crashed another 3.5%, as dairy market sentiment becomes increasingly bearish in the southern hemisphere.

For context, this is the 11th decline in the GDT dairy index out of the last 12 auctions and prices are at their weakest in more than two years.

This week’s GDT auction was led lower by a sharp reduction in dairy fat prices.

Butter prices plunged 10% to $3,640/t (€3,190/t), while the price of anhydrous milk fat fell more than 9% to $4,580/t (€4,010/t).

The price of whole milk powder (WMP), which accounted for over half of the 43,000t of product sold at this week’s GDT event, declined 2% to $2,600/t (€2,580/t).