Global Dairy Trade: Triple treat in milk marketplace

Industry analysts say the dairy decline is over — with the latest international numbers showing some rare good news.

A triple jump in international dairy prices is triggering revised forecasts of a more profitable 2024 by industry analysts.

Overnight, the headline figure on the Global Dairy Trade index rose above $US3000 in the third consecutive session of positive trade.

The GDT headline figure now sits at $US3104 ($A4931), up 4.6 per cent from the previous fortnight’s improved result of $US2957 ($A4583).

Whole milk powder rose 4.8 per cent to an average of $US2931 ($A4656) per tonne, while butter and skim powder also improved.

International dairy prices rose overnight. Picture: Zoe Phillips

Fonterra global markets chief executive Judith Swales said the three consecutive lifts on the GDT index was largely driven by stronger Chinese demand.

“It’s encouraging to see this third lift; it’s encouraging to see whole milk powder gaining strength,” Ms Swales said.

“And the futures are also pointing to strong uplift in whole milk prices.

“Great to see Chinese buyers back in the market, albeit with a holiday in China … but the signs are starting to look a lot more positive.”

But it wasn’t all smooth sailing on GDT trade, with cheese demand slipping in recent weeks.

One of the key commodities for Australia, cheddar, was down 4.8 per cent, at a time when increasing volumes of NZ cheese are being on-sold to Australian supermarkets and the hospitality sector.

Westpac chief economist Kelly Eckhold said industry expectations were that rebounding Chinese demand will lift prices in the new year.

“Prices have found a bottom after a sustained run of falls,” Mr Eckhold said.

“However, the spring peak in New Zealand production is around the corner and its strength will provide fresh direction prices.

“Heading into 2024, we anticipate that rebounding Chinese demand will lift prices, although there is clear uncertainty as to the timing and magnitude of any price recovery.”

The latest GDT results come as Agriculture Victoria confirmed the average Victorian dairy farm earned $617,000 in 2022-23, before interest and taxes, soaring above the 2021-22 result of $384,000 per farm.

Southwest Victorian dairy farmers enjoyed the biggest earnings bounce, rising from $376,000 in 2021-22 to an impressive $726,000 last financial year.