An unexpected surge in Whole Milk Powder prices has made quite a splash in the global dairy market, following the latest GDT auction overnight.
The GDT price was up 4.3% overall in a sea of green arrows. Anhydrous milkfat (AMF) had the biggest increase at 7.1% while cheese, the only product to trend downwards at the previous auction increased by the smallest amount at 0.2%. Whole Milk Powder (WMP) was up 4.2%, Butter saw a 2.9% increase, and Skim Milk Powder (SMP) increased by 4.3%.
Dairy Analyst at High Ground Dairy Phil Davison told REX host Dominic George that despite this being the fourth consecutive increase in the GDT price, it still remains below the three-year average.
"These prices are still well below the three-year average, touching on the 10-year average of prices," he explained.
"So remember, put a bit of inflation you know global inflation on that price, still relatively cheap for our buyers out there."
On the auction side of things, some surprising trends have emerged, including the rare positive result of the Shedder index. In a fascinating twist, Davidson revealed that the auction was driven not by China as one might expect, but by Southeast Asia and the Middle East.
"This was the Southeast Asia and Middle East-driven auction, mostly Southeast Asia. To be honest, they were well above their historical averages and similar for the Middle East too."
These regional shifts in buying patterns hint at a dynamic and evolving global dairy market. .
Looking forward to the future, Davidson shared his apprehensions and forecasts for buyer behaviour and what the remainder of the season may hold for the dairy market. He voiced his concerns about buyers potentially becoming more hesitant due to the rise in prices.
"But in the long run, we expect to stay within, you know, at least these prices for a little bit longer.
"So taking that down to milk price for the farm gate, that's a positive."
Despite this, Davison remains optimistic that these prices could hold out and be maintained through the rest of the season.
Listen to the full chat between Dairy Analyst Stu Davison and Dominic George above.