GDT: Increase in SMP and Butter global prices raise hopes in India

Good news for farmers in the latest Global Dairy Trade auction, held overnight, with a 4.2 per cent increase across the board.

This is the third positive event of the 2024 calendar year, with the index kicking off the new year with a 1.2 per cent bump on January 3 and 2.3 per cent at the last event on January 17.

Whole milk powder rose a sizeable 3.4 per cent to an average of US$3463/MT (NZ$5696), while skim milk powder – Fonterra’s second-biggest reference product – increased by 4.6 per cent, to an average of US$2758/MT.

Anhydrous milk fat was up 3.3 per cent with an average of US$6033/MT and butter milk powder – which wasn’t offered at the previous event – had a modest increase of 1.2 per cent to an average of US$2412/MT.

Lactose continued the upward trend with 2.6 per cent bump to an average of US$785/MT.

However, it was cheddar and butter that stole the show at this event.

Cheddar rose 6.3 per cent to an average of US$4469MT, building on a 1 per cent gain at the previous event.

Butter jumped an impressive 10.3 per cent to an average of US$6516MT, building on its 5.8 per cent increase at the previous event.

The only product to dip at this event was mozzarella, which dropped 1.8 per cent to an average of US$3760MT.

This is the fourth time the product has been included in the auction, having been introduced in the December 6 event where it debuted at an average of US$4005/MT.

A total of 24,836 MT of product was purchased by 104 successful bidders, compared to 24,909MT and 100 winning bidders last time.

On December 7, Fonterra raised its forecast farmgate milk price for 2023/24 – to a range of $7.00–$8.00 per kgMS, with a midpoint of $7.50.

This is 25 cents up on Fonterra’s previous $7.25 midpoint, announced on October 9, with a range of $6.50–$8.00 per kgMS.

This followed downgrades on August 18 to between $6.00 and $7.50 per kgMS, with a midpoint of $6.75, and August 4 of between $6.25 to $7.75 per kgMS.