Dairy markets started the new year in good form, with the Global Dairy Trade (GDT) rising by 1.2% on the back of gains in whole milk powder (WMP) at the commodity auction in New Zealand.

The first auction of the year took place on the second day of the year and while the amount of product traded was lower than normal at 26,000t, registering a 1.2% rise post-Christmas is a good start to the year.

At the time of going to press, no new figures were available from the European market, with the prices listed in the graphic the last prices registered when traders went on their Christmas break.

What the mood will be like when they return will be determined largely by the outlook for supply in Europe and New Zealand and demand for dairy in China and across Asia.

With supply in both New Zealand (dry weather pattern expected) and the EU trending downwards over recent months and some indications of a lift in demand from China, the omens are looking a lot better for milk prices compared with this time last year.

However, there is a bit of road to travel first.

The Chinese economy, while improving on where it was, is still under pressure and economic forecasts there say the economy will grow at a below average trend for 2024.

So hopes of China roaring back into the international dairy market are unlikely.

Looking at the latest GDT results, the star performer continues to be WMP, increasing in price by 2.5%, while skim milk powder (SMP) continues to struggle a bit, dropping in price by 0.9%.