Global Dairy Trade Auction 341 saw another strong 4.4% increase at the latest event overnight.
Dominated once again by North Asia, Southeast Asian countries contributed to the greatest increase in purchasing volumes compared to the previous auction. While the overall result did not come as a massive surprise to analysts, the fact that market results aligned very closely with market predictions is a positive sign of an increasingly stable and reliable market direction.
Skim Milk Powder (SMP) saw the greatest increase, up 6.6%, followed by Whole Milk Powder (WMP) up for a third consecutive event, by 4.8% in this auction and Anhydrous Milkfat (AMF) up 3.7%.
Butter prices lifted by 1.3%, with all contracts up aside from C2 which saw a 1.1% decline.
Cheddar (Ched) prices showed a significant drop at the latest Global Dairy Trade Auction, down 4.8%, with the C3 seeing the largest decrease, down 6%.
Europe, the Middle East, and North America also increased their purchases compared to the equivalent auction in 2022, although South East Asia recorded a decrease in their purchasing compared to the same period the previous year.
In the post-auction report, NZX Analyst Alex Winning explained that changes in weather as well as decreased supply were major factors leading to the purchasing increases.
"With US, EU, NZ, and South American milk production all beginning to feel the effects of increased costs and extreme weather patterns, supply is beginning to tighten on a number of commodities," she wrote.
"Last auction saw an uptake in North Asian buying, and with the region inventories getting closer to expiration on top of lower Chinese milk production, and a January tariff lift on NZ dairy, it's no surprise to see movement from that part of the world."
After a few rocky months, Kiwi farmers should be pleased with this result and can be optimistic that prices across the board are likely to remain relatively stable in the foreseeable future.