Global dairy markets received a real momentum boost this week as the GDT surged almost 13% at Tuesday’s auction in New Zealand. Having been in the doldrums since last October, the GDT has now returned two very promising results in the space of a fortnight following the 7% lift at the previous auction.

Once again, the main driver of the upswing in the GDT came from whole milk powder (WMP) with average prices increasing a whopping 19%, or $430/t, to just under $2,700/t. WMP is the most important commodity traded on the GDT accounting for more than half of product sold.

The average price of skimmed milk powder (SMP) increased by 3% to move above the $2,000/t mark but overall SMP prices still remain challenged as huge global stocks continue to overhang the market. The premium between WMP and SMP prices is now $670/t – the widest it’s been in almost two years. With New Zealand milk production forecast to decline 3% this coming season, global supplies of WMP are tightening significantly as New Zealand is the world’s largest exporter of milk powders.

Of the other commodities traded on the GDT, butter saw the strongest increase with prices jumping 14% to $3,275/t. There was also a strong increase in the average selling price of cheddar (+9%), butter milk powder (+18%) and anhydrous milk fat (+8%). The average price of lactose and casein increased by 4% and 3% respectively.

Listen to a discussion of the positive milk price trend with Irish Farmers Journal dairy editor Jack Kennedy in our podcast below:

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