The GDT auction was down 1% last week, but, importantly, it’s down to $4,981/t, which, on average across products, is excellent. That’s the second auction in a row it was down, as it was down 0.9% in the previous auction.

However, absolutely nobody in the commodity dairy trading business is suggesting this is a signal for the start of a collapse in prices.

The markets are on fire. The talk is of guaranteeing product rather than discussing price.

As many in the trade are saying, we are in unknown territory here with current market conditions. One thing is for certain and everybody is in agreement on it – global supply constraint is what is driving the current market price.

The key milk-producing regions are down, including Ireland. Germany and France, the engines behind the EU milk supply, are back. Dutch milk price lifted another 2c/litre and it looks like there is more to come.

In Europe for the coming months, milk prices still seem to rise further. This is indicated, among other things, by the already published milk prices for April.

Also, the continuing increase in commodity prices is telling us that there is more milk price rises for suppliers on the way.

New Zealand, as it nears the ending of another season, is back. The US, a market producing 100 billion litres, not as significant in the trading world, is not able to respond to the milk price signals and produce more milk, as feed and input prices make it uneconomical to produce more milk.