Global Dairy Trade takes off

The butter price even rose by 7,2% on Tuesday to $4,526 per tonne, making it well above the level before the corona crisis and also at the highest level in more than a year and a half. The increase is not an isolated event. The price of butter has been on the rise during the bimonthly auction since the end of September.

Milk powders in the elevator
The price of skimmed milk powder is also rising above pre-corona crisis levels, with the auction quotation rising by 4,1% to $3.044 per tonne. A price increase of 10% has been observed since November. Whole milk powder rose by 3,1% to $3.306 per tonne. Historically, that is a high level. In the past 5 years, the auction quotation has only been above this level a few times.

The price of cheddar is not yet at pre-corona crisis levels, but it is taking another big step by rising by 5% to $4,078 per tonne. Thanks to the pluses, the average price rises by almost 4% to $3.420 per tonne, the highest level in more than a year. At around 30.000 tons, the volume traded is somewhat lower than in recent auctions. The price rebound points to Chinese purchasing interest, which the New Zealand dairy sector has been benefiting from for some time. Possibly plays the dryness also a role in New Zealand. 

Response in EU 
The question is how the European dairy market will respond to the higher prices in New Zealand. Sometimes the GDT responds, but not always. Nevertheless, the result can be seen as a hopeful signal in this corona crisis for further price recovery. The DCA quotation for skimmed milk powder, for example, shows parallels with the GDT. However, this applies to a lesser extent to the butter market, which is mainly European and therefore less dependent on influences outside the country.