Global Dairy Trade Auction: Whole milk powder up 5.3% as overall GDT index surges 6.7%

Every product recorded a positive result in the latest Global Dairy Trade Auction. Photo / Mark Mitchell

Dairy’s 2026 momentum continues, with prices jumping 6.7% across the board in the latest Global Dairy Trade Auction, held overnight.

This follows a 1.5% lift at the last auction two weeks ago, and a strong 6.3% increase to kick off the new year on January 6.

Every product recorded a positive result in this auction.

Good news for dairy farmers as whole milk powder - which has the biggest impact on Fonterra’s farmgate milk price - recorded a 5.3% lift, to an average of US$3614/MT.

Skim milk powder - Fonterra’s second-biggest reference product – surged 10.6%, to an average of US$2874/MT.

Mozzarella matched skim milk powder’s result, also rising 10.6% to an average of US$3694/MT.

Butter was not far behind, surging 8.8% to an average of US$5773/MT.

Butter milk powder lifted 6.4%, to an average of US$3147/MT, and anhydrous milk fat climbed 5%, to an average of US$6524/MT.

Cheddar was also up, lifting 3.8%, to an average of US$4772/MT, and lactose rounded out the positive reference products - up 1.5% to an average of US$1410/MT.

A total of 24,034 MT of product was purchased by 98 successful bidders, compared to 27821 MT and 114 winning bidders last time.

Fonterra global ingredients president Richard Allen told The Country’s Jamie Mackay the strong auction was a clear sign that global demand was robust, and a “great result for our farmers back here in New Zealand”.

China’s renewed interest was a standout, Allen noting “really good participation” from Chinese buyers, alongside solid activity from Southeast Asia and the Middle East.

Their return to the market helped underpin the sharp jumps in skim milk powder and butter.

Despite recent talk of a global milk glut, Allen said the picture was more nuanced.

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While New Zealand’s milk production was tracking higher — up around 2.5% in the year to December — and Europe had also seen growth, he believed buyers had previously run inventories unusually low.

“I think what we’re seeing is dairy does have a bit of a tendency to overreact, and I think coming out of high prices, a lot of buyers around the world were probably running inventory pretty low.

“We got prices to a point where it was pretty enticing, and I think what we’re seeing now is maybe a bit of a correction back to normal inventory levels.”

A $10 payout?

Allen highlighted the season ahead, with remarkably green pastures across the North Island after persistent summer rain, and conditions looked promising for another strong production year.

Mackay asked whether this put “$10 back on the table”.

Allen remained cautious.

He said Fonterra would “run the numbers” — including the impact of recent foreign exchange movements — before making any call on revising the farmgate milk price.

On December 18, Fonterra further narrowed its 2025/26 farmgate milk price forecast to a range of $8.50-$9.50/kgMS, with a midpoint of $9 per kgMS.

This follows Fonterra cutting its 2025/26 farmgate milk price forecast to a range of $9$10 per kgMS, with a midpoint of $9.50 per kgMS on November 25.

The co-op’s opening forecast on May 29 was $10 per kgMS, with a wide range of $8-$11 per kgMS, but was narrowed to $9-$11 per kgMS, with a midpoint of $10 per kgMS, on August 21.

Fonterra paid $10.16 per kgMS for the 2024/25 season.