The latest Global Dairy Trade (GDT) auction delivered an overall price increase of 1.5 per cent. While the cheese market shows signs of weakness, it is demand for butter and milk fat in particular that is driving the upward trend.

The global dairy market is once again showing positive momentum, albeit with significant differences across product categories. At Tuesday’s Global Dairy Trade (GDT) auction, the overall price index rose by 1.5 per cent, pushing the average price up to USD 3,615 per tonne.

Butter and fats lead the way
Fat-rich products are clearly acting as the engine behind the increase. Prices for anhydrous milk fat (AMF) jumped by 3.0 per cent to USD 6,191 per tonne, while butter followed with a rise of 2.1 per cent to USD 5,314 per tonne. This reflects continued strong international demand for fat components.

Headwinds for the cheese category
While fats pulled prices up, cheese moved in the opposite direction. The category saw a broad-based decline across key products: mozzarella fell by 2.3 per cent to USD 3,340 per tonne, while cheddar dropped by 1.4 per cent to USD 4,594 per tonne.

This downturn in cheese prices contrasts with developments in the milk powder category, which also contributed positively to the overall index. Skim milk powder rose by 2.2 per cent to USD 2,615 per tonne, while whole milk powder recorded a more modest increase of 1.0 per cent to USD 3,449 per tonne.

A market out of balance
Although the overall index ends in positive territory, the auction paints a picture of a global market moving unevenly. While milk powders and fats show strength, falling cheese prices and a 1.8 per cent decline in lactose prices create some uncertainty about the broader market balance.

By Maja Løvstrup
Source: Effektivt Landbrug
Photo: Colourbox