Dairy markets got another shot in the arm this week with the Global Dairy Trade (GDT) auction result defying expectations and increasing in value by 5.5%.

A positive result was expected, but the increase of 5.5% was more than most expected and sends a very positive signal to the market.

The amount of product traded at this event was only marginally behind the last auction at 34,916t.

The big mover was whole milk powder (WMP), which increased by 7.2%, followed by anhydrous milk fat, which went up 4.8%.

Skim milk powder (SMP), which has been a laggard for the last few months, took a good turn upwards, increasing in price by 4%.

Mozzarella cheese went up 5%, although the quantities traded are small, as it’s a new addition to the GDT.

Butter prices went up 3.7%, but it’s in Europe where the main increases in butter are being seen and prices there went up €140/t this week to reach €7,355/t, which is the second-highest price ever recorded for butter and if it rises again next week, it is likely to surpass the 2022 peak.

The futures market for butter continues to show gains, with EEX putting it at almost €7,700/t for October.

There were rises for all other key commodities in Europe this week also. Cheddar was up €70/t to €4,400/t, WMP up by €65 to reach €3,990/t and SMP up by €45/t to €2,390/t.

The increases are more of a sign of the market reacting to lower supply than an increase in demand, with China is still very much out of the market.