Bounce to dairy trade as prices even off

Dairy markets have bounced upwards in Europe and New Zealand over the last week, with European butter prices increasing by €215/t, while skim milk powder has increased by €180/t.

This follows the higher than expected Global Dairy Trade (GDT) auction last week, which saw the index increase by 6.7%.

The increase in the GDT has prompted New Zealand bank ANZ to increase its 2025/2026 season farmgate milk price to $9.50/kgMS (€4.82/kgMS), which is $0.50/kgMS (25c/kg MS) higher than the Fonterra prediction.

A statement from the bank said that although global dairy supply and demand factors haven’t meaningfully improved, dairy prices have rebounded strongly so far in 2026.

“In retrospect, the price drops in late 2025 were overdone. The welcome bounce has materially improved the milk price forecast for the current season,” it says.

However, the bank goes on to say that it is reducing the predicted milk price for the 2026/2027 season by 8% to $8.70/kgMS (€4.42/kgMS).

Meanwhile in the US, the price of milk continues to fall, with the class III or manufacturing price dropping to $14.59/cwt (27.8c/l) for January, down $1.27/cwt (2.42c/l) from December 2025 price.

Over the past 12 months, the price of class III milk in the US has fallen by 28%.

Milk supply in the US was up 4.6% in December 2025 compared to December 2024, with total production for 2025 up 2.5%. This equates to an extra 2.47 billion litres of milk.