Dairy markets continued their upward gains this week, with the Global Dairy Trade (GDT) auction increasing in price by 1.7% and continued gains on the European spot market too.

At the GDT, the increase of 1.7% at this auction is the fifth consecutive auction without a fall and a cumulative gain of 9.7% in the index price since the last decline in mid-March.

Strongest gains were for skim milk powder (SMP) increasing by 3% and then followed by whole milk powder (WMP) and butter, which both increased by 1.7%.

The number of product moved continues the trend to lag behind normal, with just over 17,600t sold.

Meanwhile, the spot market in Europe continues to heat up, with steady gains for butter (up €105), WMP (up €30/t) and cheddar (up €70/t).

Cheddar has gained €315/t in the last four weeks, up 8% in price per tonne.

Butter is up €725/t over the same period, which is an increase of over 12%.

Milk prices right across Europe are increasing on the back of the higher market prices, with Arla and Friesland Campina nudging their base prices up by 0.5c/kg for June.

Over in New Zealand, Fonterra has increased its milk price outlook for the next season, but not by much.

To put it in context, Fonterra will pay a milk price of $7.80/kg MS for the season just ending and expects to pay a milk price of $8/kg MS for next season, with a range of $7.25/kg MS and $8.75/kg MS.

The range will narrow as the season progresses, but it’s not a bumper outlook that some might expect.