Global dairy markets are under renewed pressure as oversupply continues to outpace demand, leading to a fourth consecutive price drop in the Global Dairy Trade (GDT) auction. The average auction price fell by 4.1% to US$4274/MT, highlighting growing challenges for dairy exporters. Whole Milk Powder (WMP), a key driver of farmgate pricing, dropped 5.1% to US$3859/MT, marking an 11% decline since its early May peak.

The volume of product traded surged 69% to 25,705MT compared to the prior auction, largely due to the seasonal return of Fonterra’s volumes and concurrent peak production in the Northern Hemisphere. NZX dairy analyst Rosalind Crickett emphasized that these factors amplified downward price pressure but also spurred increased interest from North Asia. Chinese buyers, facing continued domestic production struggles, more than doubled their purchases year-on-year.

While WMP led the decline, other commodities followed suit. Skim Milk Powder (SMP) dipped 1.7% to US$2718/MT, and butter fell 4.3% to US$7522/MT. Anhydrous Milk Fat also declined to US$6928/MT, and cheddar dropped 2.8% to US$4860/MT. Mozzarella remained relatively stable, down only 0.2%. The few bright spots were Butter Milk Powder and lactose, which rose 9.3% and 4.2%, respectively.