The GDT index rose by 2.1% at Tuesday’s auction in New Zealand – just the second positive result the benchmark dairy index has returned this year.

Despite the increase, dairy markets remain in very weak territory at present, with the GDT index more than one third (34%) lower than it was this time last year.

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At Tuesday’s auction, the average price of whole milk powder (WMP), the key dairy commodity traded on the GDT platform, accounting for half of sales, rose by 1.5% to move over the $2,000/t mark for the first time since late January.

Skimmed milk prices were flat (+0.1%) and remain on the floor at just over $1,700/t, while cheddar prices showed a strong rebound – increasing by almost 11% on average.

Other commodities to record an increase included casein (+12%), anhydrous milk fat (+7%) and lactose (+6%).

Average butter prices fell 2% to just over $2,700/t, while butter milk powder was back more than 8% in price.

As the New Zealand milking season begins to wind down, the volume of product sold at Tuesday’s auction remains low, with just under 23,700t sold. This time two years ago, volumes were closer to 40,000t.

Milk futures

Meanwhile, the New Zealand financial markets operator NZX has announced it is developing a new market that will offer futures and options contracts for milk prices to local farmers.

These new milk price futures contracts will allow New Zealand dairy farmers the chance to manage some of their exposure to falling farm gate milk prices and dairy market volatility.

NZX will begin offering these milk price futures from May and says it will give farmers a way to fix their milk price to reduce uncertainty.