There was a bit more positivity in the dairy markets this week, with both butter and whole milk powder (WMP) prices starting to rally a bit, after weeks and weeks of declines.
In contrast, skim milk powder (SMP), which spent the last five months on a sustained upward rally, dropping in price by €50/t, while cheddar cheese prices remained stable.
The latest milk supply data from New Zealand shows that milk solids production there is up 6.9% in April 2026 compared with April 2025.
It’s a huge increase, albeit back a bit on the 9.2% increase seen in March milk.
Relatively benign weather and strong farmer optimism with Fonterra share payouts and a strong expected milk price from the co-op is likely to be behind the big increases.
The Global Dairy Trade (GDT) auction prices are also more positive than they are in Europe or the US. Having said that, the GDT pulse prices for both WMP and SMP declined this week.
The next big auction is next week, so it’ll be interesting to see if prices correct then.
Fonterra is expected to announce its 2026/2027 forecast farmgate milk price this Thursday, with some analysts expecting it to be similar to the current forecast milk price for 2025/2027 season, which has a mid-point of $9.70/kg MS (€4.87/kg MS).
It’s interesting to note, looking at the GDT now versus this time last year, WMP is down 12.3%, butter is down 26.4% and anhydrous milk fat is down 12.8%. The only positive is SMP, which is up a staggering 25.9%.
Meanwhile, in Europe, I see Friesland Campina has reduced the base price of milk for June by 25c/kg, which it had added to milk price for May.
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