The price rises at the latest global diary trade auction have been described as a “very good result” for New Zealand dairy farmers.
Photo: 123RF
Dairy prices rose again at the global dairy trade auction overnight – continuing a reversal of last year’s downward swing and raising questions about whether a $10 milk payout could be back on the table.
The average price rose 3.6 percent to US$4028 a tonne – it follows the 6.7 percent rise a fortnight ago, and is the fourth consecutive increase of the year.
Rabobank Dairy Analyst Emma Higgins said it was a “very good result” for New Zealand dairy farmers, with meaningful gains across key products.
The price of wholemilk powder, which strongly affects farmer payouts, rose 2.5 percent to US$3706 a tonne.
Prices for other products were mostly stronger, including a sharp increase in butter which rose over 10 percent.
“Overall, the event reinforced a couple of things. First is that there is improving demand sentiment across the dairy complex,” Higgins said.
“With current current dairy commodity prices where they are, the question begs whether we’ll start to see an increase in the farmgate milk price forecast for the 2025/26 season.”
Higgins was cautiously optimistic, adding there was still a lot of milk available on the global market at the moment.
“We’ve had some incredibly strong growth in the European Union, particularly driven from Ireland, France and Poland. And then if we think about the United States, we’ve seen consistently strong milk production for the majority of 2025.
“That was the reason that we saw weaker commodity prices at the back half of last year. It was the reason that we saw farmgate milk prices slashed by Christmas time.
“Now we’ve got the situation where demand is starting to improve, and at the same time, we’re starting to see perhaps some signals as we move through 2026 that supply environment will start to tighten up.”
She said current market dynamics would suggest there was support for lifting the current milk price forecast from where it sits at that midpoint range of $9, up to somewhere around the $9.50 per kilogram of milk solid mark.
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