Dairy markets got a boost this week with the Global Dairy Trade (GDT) rising by 3.3%.

On top of this, the weekly prices in Europe all shot up too, with butter hitting €6,180/t - a €225/t increase and the highest price since it collapsed in December 2022.

Cheddar took a big jump too, rising in price by €130/t to hit €4,100/t.

The confidence at the GDT is significant and follows on from a 1.8% increase in the index at the last auction.

All of the key commodities took a lift at this week’s auction, with butter increasing in price by 5.1%, whole milk powder (WMP) increasing in price by 2.9%, skim milk powder (SMP) increasing in price by 3.5% and anhydrous milk fat (AMF) increasing in price by 3.5%.

The amount of product sold at the auction, at just over 18,500t, was similar to the previous auction.

The increase in butter prices at the auction is notable. At €6,381/t, it’s the highest price achieved since the peak in 2022 and we’re not far off that peak price now for butter at the GDT.

The rise for more basic commodities such as WMP and SMP is also very positive and could be a signal that China is back buying a bit more or a signal to buyers that with milk supplies falling, it’s time to secure prices.

The prospect of a short-term price peak in mid-season was flagged for some time and maybe now we are seeing the early signs of that. While most of the co-ops have left base milk prices unchanged for April, if prices keep going up, they’ll be under pressure to increase milk price.