Global Dairy Trade Index rises 3% as milk powder prices surge

GLOBAL – The Global Dairy Trade (GDT) price index has recorded its strongest auction-to-auction increase since February, rising by 3% in the latest trading event.

The recovery was primarily driven by stronger demand for milk powders and cheese, raising expectations among New Zealand dairy farmers that processors could improve their full-season milk price forecasts for the 2026/27 season.

The latest auction results indicate improving demand across key internationally traded dairy commodities, particularly whole milk powder (WMP) and skimmed milk powder (SMP).

Whole milk powder prices recorded the strongest performance, increasing by 5.9%, marking their largest single-auction rise this year.

Skimmed milk powder prices also strengthened, gaining 3.1% and reaching their highest level on the GDT platform since June 2022.

The positive movement has strengthened market expectations that New Zealand dairy processors could raise their full-season farmgate milk price forecasts to NZ$10 per kilogram of milksolids or higher.

Milk Powders and Cheese Drive Global Dairy Trade Recovery

The latest auction demonstrated contrasting price movements across different dairy commodity categories. While milk powders and cheese recorded significant increases, butter and anhydrous milk fat (AMF) prices declined.

Cheddar cheese prices increased by 8.6%, while mozzarella recorded a rise of 5.8%. These gains indicate stronger buying interest in dairy ingredients and finished dairy products.

In contrast, butter prices declined by 4.7%, while anhydrous milk fat fell by 3.2%. Despite the weakness in dairy fats, the stronger performance of milk powders and cheese was sufficient to lift the overall GDT price index.

Increased purchasing activity from Asian markets played an important role in the latest auction outcome. Buyers from China accounted for 59% of the total volume sold, providing substantial support to milk powder demand.

Rosalind Crickett, an NZX dairy insights analyst, said the auction results significantly exceeded expectations in both the physical dairy market and futures trading.

Despite the positive movement in milk powders, the dairy fat segment continues to face supply-related challenges.

The report attributed weaker butter and AMF prices to increased butterfat availability among major dairy exporters, including the European Union, the United States, Argentina and New Zealand.

While milk powder inventories were broadly aligned with firm import demand, milkfat products were considered to be in relative surplus.

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