The New Zealand (NZ) Global Dairy Trade (GDT) auction price increased by 3.2% this week, with butter and whole milk powder (WMP) leading the charge, rising by 6.6% and 3.8% respectively.

The quantity of product sold at the auction was also high, with over 35,000t of product sold, up from the previous sale.

The overall rise of 3.2% was the highest increase seen since last September and one of only four price increases since then.

The weather in NZ has been difficult this season, with recent floods across the North Island likely to dampen milk supply, which may have prompted some traders, particularly those in China, to re-enter the market to secure sufficient supplies in advance of the NZ autumn.

All analysts were pointing to the fact that China was likely to re-enter the global dairy market in the second quarter of 2023, but the increased demand for dairy at this auction gives hope to sellers and farmers alike that they might be moving earlier than expected.

Back in Europe, there is also growing evidence of prices stabilising. Butter prices increased by 2.3% this week to €4,285/t, but they continue to lag behind the GDT price.

On the other hand, WMP fell again by €100/t to €3,350/t, but continues to lead the GDT weighted price per tonne for WMP.

Meanwhile, in the US, the USDA has revised downwards its forecast for milk prices in 2023 by 5% to $21.6/cwt (46c/l) while the milk price in 2022 was estimated at €25.55 (54.36c/l). The USDA is expecting lower milk volumes in 2023 due to lower prices.