Another lift in global dairy prices

Global Dairy Trade buyers are lifting their bids despite more milk being collected on dairy farms...
Global Dairy Trade buyers are lifting their bids despite more milk being collected on dairy farms. PHOTO: SUPPLIED
A third lift in milk prices on the Global Dairy Trade (GDT) auction will be welcomed by dairy farmers hoping for a higher Fonterra payout.

Prices improved by an overall 6.7% on Tuesday at an average price of $US3830 ($NZ6340) a tonne.

This follows GDT rising 1.5% on January 20 and 6.3% on January 6 after a nine-auction run of losses.

GDT results are factored in with other indicators by Fonterra to forecast its milk payout, sitting at a $9/kg midpoint after its range went from $9/kg-$10/kg to $8.50/kg-$9.50/kg on December 18.

At that stage strong milk flows locally and globally, particularly out of the United States and Europe, were continuing to put pressure on global commodity prices.

However, this failed to deflate GDT buyers as 100 bidders bought just over 24,000 tonnes during the auction.

Rising just over 10% were mozzarella at $3694 a tonne and skim milk powder at $2874, followed by an 8.8% rise in butter at $5773. All eight products increased to some degree.

Last month, Federated Farmers dairy chairman Karl Dean said a repeat of the record $10.16/kg midpoint for the 2024-25 season was unlikely, but a payout increase was possible with more good GDT results.

The 2025-26 season started with Fonterra opening its forecast to a range of $8-$11 a kilogram of milksolids.

Since then the range has narrowed.

The next auction is on February 17.

tim.cronshaw@odt.co.nz