Five consecutive price increases at the global dairy auction are sending fresh positive signals from the world market. At the same time, Arla has kept its conventional milk price unchanged while organic milk prices have been reduced.

The global dairy auction Global Dairy Trade (GDT) again recorded gains at the auction on 3 March. The overall price index rose by 5.7 per cent, following a 3.6 per cent increase at the previous auction. Prices have therefore risen for five auctions in a row.

The increase is seen as a sign that global demand for dairy products is picking up again. However, the development must be viewed in the context of the significant decline in the GDT index during the second half of 2025. Part of that drop has now been recovered.

Powder and mozzarella drive the increase
At the latest auction, it was primarily the powder categories that pushed prices higher. Skimmed milk powder rose by 9.1 per cent, while mozzarella increased by 7.9 per cent.

The only categories to record declines were buttermilk powder, which fell by 0.2 per cent, and lactose, which dropped by 3.9 per cent.

Large milk volumes in Europe
Despite the positive development at the auction, several market analyses suggest that it is still too early to expect significant increases in milk prices.

When Arla announced its milk price for February, the cooperative kept the conventional milk price unchanged. At the same time, milk production remains high in several major producing countries.

Production has increased particularly in the EU, where countries such as Germany and France have significantly raised milk deliveries. Production has also grown in the United States, while developments in Australia and New Zealand have been more moderate.

The large milk volumes mean that the market continues to be characterised by substantial supply. According to the advisory firm Agrocura, this situation is expected to persist through most of 2026, as it takes time for production to adjust to demand. Consequently, Agrocura does not expect major price increases this year despite the positive auction signals.

Organic price reduced
While the conventional milk price remains stable, Arla has reduced the price paid to organic producers from 441.7 øre per kg of milk to 426.7 øre per kg in March.

As a result, the gap between conventional and organic milk prices has narrowed, although the difference remains historically high.

By Maja Løvstrup
Source: Effektivt Landbrug / Global Dairy Trade
Photo: globaldairytrade.info