Global Dairy Trade: Market bounces, aiding A2 and Bega

International dairy figures are on the up, giving Aussie farmers refreshed hope for future farmgate success mid-year.

Better butter prices have lifted international dairy trade, giving Australian farmers refreshed hope for future farmgate success mid-year.

The headline figure on the Global Dairy Trade index rose 2.3 per cent to sit at $US3493 per tonne ($A5309), the fourth-consecutive trading session in positive territory.

Butter was the big lifter this week with an impressive 5.8 per cent jump to an average of US$5906 per tonne ($A8976).

Weak international prices have been the source anxiety within the Australian dairy sector throughout 2023, with New Zealand exports flooding Australian supermarket refrigerators and undercutting local produce on price.

International dairy prices are stabilising. Picture: Zoe Phillips

Infometrics principal economist Brad Olsen said the GDT index had lifted by more than a quarter since an August 2023 low left Australian processors concerned.

“It’s fourth straight increase and more importantly, it’s the highest the index has been since February 2023,” Mr Olsen said.

“So in just about a year, we’ve seen a recovery — whole milk powder coming up 1.7 per cent, up to $US3353 a tonne.”

“There hadn’t been strong demand through part 2023 (for dairy), we saw export returns getting into a much more challenging position.”

As a result of the weak international market, Australian processors have been reluctant to step up at the farmgate.

A slight exception to the rule has been Norco, with the co-operative offering a ‘Christmas bonus’ to farmers last month.

An influx of New Zealand cheese has been noted by Dairy Australia analysts in recent months, with its latest situation and outlook report recording 2023 as a record year for imported dairy into Australia.

ABS data showed New Zealand butter shipments were up 62 per cent in the 12 months to the end of June 2023; milk spiked by 74 per cent; and ice cream imports rose an extraordinary 105 per cent last financial year.