Global prices for dairy products demonstrate stability against a backdrop of increasing supply.

Experts at the New Zealand Exchange assess the current result as more resilient than might have been expected given the increase in seasonal supply. Demand for milk powder remains stable, and the decline in prices for milk fats proved less pronounced than at the previous auction. Buyer activity continues as the market prepares for the holiday period—Christmas, the Chinese New Year, and the start of Ramadan—which is traditionally accompanied by an increase in available product volumes.

A key trend of the recent auction was high demand for protein, which is supporting prices despite the increased availability of milk powder. Meanwhile, the fat market is under pressure, and the supply situation for cheese remains challenging. The price stability of powder products remains important given the expected reaction of milk production in the Northern Hemisphere to the consequences of the recent drought and extreme heat.

The price of whole milk powder decreased by 0.1% to 3,585 USD. This occurred against the backdrop of an increase in supply from Fonterra by nearly 8%, although the market absorbed the additional volumes without a significant decline in quotes. Skimmed milk powder, by contrast, increased in price by 5.3%, reaching a 12-month high despite a nearly 10-percent increase in supply volumes compared to the previous auction.

The milk fat segment demonstrated a moderate decline. The price of butter fell by 0.8%. The weakest link was cheddar: its value dropped by 6.6% to 3,503 USD, which became the lowest figure on the GDT platform in the last five years.