NZX is forecasting a milk price of $9.98 per kilogram of milk solids for the 2026/2027 season, with the current season tracking at $9.73, as global demand for dairy proteins continues to support prices.
The most recent Global Dairy Trade (GDT) event returned a 1.5% lift after two consecutive declines, says Cristina Alvarado, Head of Dairy Insights at NZX.
“The US is running low in their inventory.
“There’s not enough to supply to cover the demand for protein, so people have been buying more skim milk powder and whole milk powder, which is basically what caused the lift on the GDT price overall.”
Buyers have been moving toward hand-to-mouth purchasing rather than building stock, Alvarado says. Last event that shifted, with Southeast Asia purchasing around 41% of total product sold.
“People want to lock in product at the prices that they are now because they know that cost continues to go up.”
Tonnage at this point in the season is running at roughly half of peak levels, Alvarado says. The last event sold around 13,700 tonnes, compared with 20,000 to 30,000 tonnes typically seen at the height of the season. She says whole milk powder and skim milk powder dominate by volume, which means price movements in those products carry more weight on the overall GDT index.
Looking ahead to the next auction, open interest in skim milk powder closed last week at 6,300 lots and whole milk powder at nearly 5,000 lots, suggesting continued demand for both products. Alvarado says the near-term outlook is reasonably positive, but she urges caution over the longer term given ongoing uncertainty around the Middle East conflict and its flow-on effects to fuel costs, shipping and consumer spending.
“For now, we’re lucky enough that New Zealand is in a position that can provide product to Southeast Asia, Asia, and even all the west coast of the American continent with no issue.
“But generally when you’re talking about the big picture of the world economy, if the prices keep going up because of fuel prices and the cost of shipment and insurance and all of that, that’s going to add pressure to the consumer.”
She says NZX offers free workshops around the country to help farmers use milk price futures.
“It can go up, but it can also go down, and we have seen how badly it can go down sharply from one week to the other.”
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