This week saw the GDT index recorded its fifth consecutive rise to reach its highest point in almost three years.

The benchmark dairy index, based in New Zealand, increased 3.2% at this week’s auction, with all traded dairy commodities selling for an average price of $3,313/t. This is the highest the index has been seen since June 2014.

Once again, the GDT’s performance was dragged higher by the continued improvement of whole milk powder (WMP) prices, which is the most important dairy commodity traded on the auction platform. WMP prices also increased for the fifth auction in a row, to just over $3,300/t at this week’s auction.

In early December 2016, WMP prices peaked at their highest point in two and a half years, but recovering milk supply in New Zealand saw prices decline rapidly right through to early March by almost 25% or more than $800/t.

However, over the last two months, the market has recouped almost all of these losses and WMP prices are back close to three-year highs.

The outlier in powder markets will continue to be the price of skimmed milk powders (SMP), where prices remain dampened by EU intervention stocks.

In Europe, dairy commodity prices have all moved higher in recent weeks.

Supply shortages in Europe have seen butter prices rise to trade as high as €4,500/t, while cheddar is trading close to €3,300/t.