The Global Dairy Trade (GDT) index, an indicator of international dairy market sentiment, has built on its strong performance in recent weeks, rising by 5.9% in the latest auction (6 February).
The increase takes the auction average price to $3,553/t (£2,562/t), restoring the index to its highest level since September 2017, 13.5% above the lows seen in mid-December of that year.
According to Nick Holt-Martyn of The Dairy Group, the rise equated to 25.3p/litre, 1.3p/litre above last week’s actual milk price equivalent (Ampe) price.
All products traded saw an increase in value, with skim milk powder (SMP) and whole milk powder (WMP) – the auction’s two most-traded commodities – performing particularly well.
SMP rose by 7.2% to average $1,932/t (£1,391/t), while WMP increased by 7.6% to $3,226/t (£2,322/t).
Cheddar, butter milk powder and butter saw similarly strong returns, increasing 7.2% to $3,739/t (£2,691/t), 8.4% to $2,039/t (£1,468/t) and 7.9% to $5,277/t (£3,798/t), respectively.
The positive result follows sustained dry weather during the New Zealand summer, fuelling fears of a drought as well as the prediction of 3% fall in production over this season by the country’s largest dairy co-op, Fonterra.