After the last two positive results from the GDT auction in New Zealand, producers and processors alike have been hopeful that the decline in global dairy markets has bottomed out and prices may be turning a corner.

The rise in prices from the GDT last week has also been bolstered by commentary from the industry suggesting that the Chinese have recently become more active in the market for dairy products, despite its recent economic woes.

The latest figures from Europe also suggest prices may be turning a corner.

This week’s report from the Dutch dairy index shows an increase across the board for all dairy commodities.

Prices for butter increased 1.9%, while skimmed milk powder (SMP) gained by 1.2%.

Whole milk powder (WMP) made the strongest gains – with prices increasing by 4.5%.

On the world market, US quotes for cheddar and SMP made strong gains, increasing by 6.5% and 7.1% respectively. US prices for butter, which are significantly ahead of the rest of the world, increased by 3.8% as strong domestic demand continues.

In Oceania, there were significant gains for milk powders, albeit from a very low base. Prices for SMP increased by 14.4%, while WMP quotes were almost 10% ahead of last week’s prices.

Closer to home, the board of Ornua met on Tuesday to set its product purchasing index (PPI) at 91.5 for August, down just 0.3 from the July PPI.

At a PPI of 91.5, this would equate to an August milk price of 26.96c/litre including VAT and leaves the index at its lowest point since its base year in 2011.

Although this is the fifth straight month the PPI has fallen, the marginal decline this month may be a signal that markets conditions are improving.