Global dairy prices are climbing despite strong milk production from major exporting regions, defying conventional market expectations, according to the latest market report from Rural News Group.
The Global Dairy Trade (GDT) platform recorded its second consecutive price increase, reversing several months of softer trading and signalling renewed buyer interest in key dairy commodities, particularly milk powders.
In the latest auction, whole milk powder prices jumped by around 15%, while skim milk powder rose by more than 2%. The gains surprised analysts who had expected continued price pressure given the current supply-heavy environment.
Milk production remains robust across major exporters. New Zealand, the world’s largest dairy exporter, reported season-to-date milk output up 2.4%, or 3.1% on a milksolids basis, compared with the same period last year. December collections were among the highest ever recorded for that month, just short of historical peaks.
Ample supply is also evident in the Northern Hemisphere. In the United Kingdom, reports of milk dumping highlight ongoing surplus conditions, reinforcing the view that global milk availability remains plentiful.
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However, market observers say regional inventory constraints are helping to support prices. In the United States, relatively tight stocks—particularly of skim milk powder—are underpinning international demand and lending support to GDT prices. This highlights how regional supply-demand imbalances can offset global oversupply, at least in the short term.
Analysts caution that the market remains finely balanced. While production across major dairy regions continues at elevated levels, sustained price gains will depend on whether demand can keep pace as seasonal production peaks pass and inventories adjust.
For dairy producers and exporters, the recent price movement underscores the growing importance of closely tracking regional market dynamics in an increasingly volatile global dairy landscape.
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