Based on the auction results, prices for key commodities increased, which may be attributed to a reduction in supply at the auction, slowing milk production in Oceania, and a gradual recovery of demand in the global dairy market. According to The New Zealand Herald, this was the most significant growth in the GDT price index since 2021, reports Georghii Kuhiashvili, analyst at the Association of Milk Producers.
On Tuesday, February 3, the 397th GDT auction took place, resulting in a price index of 1161, which is 73 points (+6.7%) higher compared to the previous auction. The average price for dairy products was $3,830 per tonne, which is $215 more than the results of the previous auction. During the auction, 22,714 tonnes of commodities were sold, 5,107 tonnes less than the results of the last auction. The minimum supply was recorded at 28,866 tonnes, and the maximum at 24,034 tonnes. 175 dairy market operators participated in the auction, which is 11 companies more than on January 20.
According to the auction results, the price for anhydrous milk fat was $6,524 per tonne, up 5% from the previous auction. The price increase for anhydrous milk fat was likely influenced by slowing milk yields in Oceania and a decrease in supply during the auction. According to USDA, milk fat prices decreased in Europe last week due to significant supply and a lack of urgent orders from buyers. According to the GDT forecast, anhydrous milk fat prices may decrease by 0.1% in March and rise by 5.1% in April.
The price for butter at this auction was $5,773 per tonne, which is 8.8% higher than the results of the previous auction. According to USDA, butter prices rose in Oceania due to a seasonal decline in milk yields. Demand for butter produced in Oceania is gradually increasing in export markets despite it being more expensive than American butter. According to Dairy Dimension, there are concerns among market participants regarding the negative impact of the El Niño weather phenomenon on pasture growth in New Zealand, which could lead to a decline in raw milk production in the coming months. El Niño causes anomalous weather changes globally, including droughts, floods, and heavy rainfall due to the warming of the Pacific Ocean surface.
However, as reported by USDA, dairy processors in the USA report sufficient cream volumes in the market, though some are not operating at full capacity due to moderate demand for butter in both domestic and export markets. Adverse weather conditions last week in certain US regions caused logistical problems and slowed the shipment of raw milk from farms to plants. Last week, butter prices weakened in Europe due to a lack of active demand from buyers—who are mostly covering immediate needs—as well as a surplus of raw milk and growing warehouse stocks. As reported by Dairy Dimension, after a modest recovery in butter trade following the New Year holidays, the price in Europe dropped by 115 euros, reaching its lowest level (€3,835 per tonne) since 2021. Auction organizers expect the price of butter to increase by 7.3% in March and by 8.6% in April.
The price for whole milk powder was $3,614 per tonne, rising by 5.3% compared to the previous auction. According to USDA, prices for whole milk powder rose last week in the USA, Europe, and Oceania. In the USA, prices strengthened following price increases for butter and skim milk powder, and in Oceania due to the seasonal slowdown in yields. Buyers from Algeria primarily purchase whole milk powder from Oceania. Brazil remains a net importer of whole milk powder, as domestic milk production volumes are lower than demand. During the last session, the largest amount of whole milk powder was purchased by clients from North Asia, followed by buyers from the Middle East and Southeast Asia.
A long-term challenge for exporters of whole milk powder is the shifting landscape of China's dairy sector. According to Edairy News, China has been pursuing a policy of milk self-sufficiency for over a decade. Thanks to the development of so-called "mega-farms" with large productive herds and automated systems, China managed to increase raw milk production to 42 million tonnes in 2023. At the same time, per capita consumption of dairy products in China has been declining in recent years due to economic difficulties, changing dietary habits, and record-low birth rates, reducing demand for liquid milk and infant formula. Parallel to the decrease in imports of whole milk powder, China has begun to increase its own dairy exports. For example, in 2024, China shipped 70,000 tonnes of dairy products, primarily milk powder, to Southeast Asia, Africa, the Middle East, and Central Asia. However, China remains dependent on imports of cheeses, butter, and premium dairy products. Auction organizers forecast a price increase of 5.7% in March and 6% in April.
The price for skim milk powder was $2,874, up 10.6% from the previous auction. As reported by USDA, prices for skim milk powder rose in the USA, Europe, and Oceania, as well as in export markets. Demand for American products intensified globally. European skim milk powder is currently cheaper than the product from Oceania. According to Dairy Dimension, export shipments of skim milk powder from Europe were higher than last year, and buyers remain active due to competitive prices, indicating stable demand for dairy proteins. According to Farmers Journal, representatives of Ornua at the Gulfood exhibition in Dubai confirmed a global demand for protein. However, Dairy Dimension clarifies that high global protein supply and cautious buyer behavior still keep dairy markets under pressure.
According to Vesper, skim milk powder prices have been rising since early January 2026 due to production cuts in previous periods. Specifically, in November 2025, skim milk powder production in the USA decreased by 9.8% compared to November 2024, as liquid skim milk was used for other products rather than drying. The price increase in Oceania occurred amid the seasonal yield slowdown. Stable demand exists in Brazil due to its large population and limited raw milk production capacity. However, as reported by Edairy News, cautious behavior by Asian buyers and smaller purchase volumes have led to an increase in skim milk powder stocks, pressuring global prices and reducing exporter margins. According to the GDT forecast, skim milk powder may increase in price by 15.1% in March and by 11% in April.
Cheddar cheese rose to $4,772 per tonne (+3.8%), and Mozzarella cheese increased to $3,694 per tonne (+10.6%). According to USDA, snowstorms in the USA negatively impacted the production plans of local cheesemakers and led to disruptions in raw milk supplies. Cheese demand in the USA is moderate but more active in export markets. According to Edairy News, in January, the USA increased cheese shipments to Mexico and Asian countries. As reported by Ever.Ag, per capita cheese consumption in the USA has slowed over the last 4 years, and fewer new pizzerias are opening—historically a key driver of cheese demand—due to rising pizza prices post-pandemic and competition from other food service establishments, particularly Mexican restaurants that also offer online ordering and delivery. However, Ever.Ag estimates that growth points for pizzerias exist in South Korea and Japan.
European cheesemakers have utilized their capacities almost to the full, taking advantage of unpredicted yield increases (mainly in Germany and France). European traders report an increase in cheese sales under contracts for the first quarter of 2026. According to AHDB, there has been a rise in demand for dairy products in Gulf countries, specifically for British Cheddar in Saudi Arabia and the UAE since the early 2020s. As reported by Farming UK, the Middle East and North Africa (MENA) region could become the world's second-largest net importer of food by 2034, driven by population growth and increased dairy consumption. According to USDA, last week in Oceania, Cheddar prices decreased in the lower range due to weaker demand in export markets, including Brazil, although the decline in regional yields has kept prices high in the upper range. Auction organizers expect Cheddar to rise by 1.5% in March and 1.4% in April, while Mozzarella may rise by 11.5% in April.
Lactose rose to $1,410 per tonne (+1.5%). According to USDA, lactose prices are mostly stable but strengthened in the lower range in the USA. Buyers are inquiring about second-quarter contracts during negotiations. International demand for lactose is strong, and stocks are limited. Auction organizers forecast a 1.5% price increase in April.
Buttermilk powder rose to $3,147 per tonne (+6.4%). Prices are increasing in the USA, where demand is gradually growing and remains stable in export markets. American producers face a shortage of available drying capacity for buttermilk as raw material volumes are significant and processing plants are busy with other orders. Auction organizers forecast a 14.9% price decrease in March and an 8.8% increase in April.
The next GDT auction will take place on February 17.
Press Service of the Association of Milk Producers
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