Here is John Hallo in our latest edition of the Inside Track, sharing updates on global dairy markets. In edition 185, short term demand has helped support pricing, despite healthy supply conditions globally.
Click here to watch more Inside Track videos.
The Inside Track Podcast
Get up to date on the go. Subscribe and Follow on your preferred app:
Inside Track: Early February Dairy Market Update
As we move into the first week of February 2026, the dairy industry is experiencing a mix of positive momentum and shifting global dynamics. The past week has brought warm weather in Brisbane and notable changes across key commodity markets, making this an important moment to take stock of what is happening in the sector.
Global Dairy Trade Index Shows Strong Lift
The latest Global Dairy Trade (GDT) event delivered a positive outcome with an overall increase of about 6.7 percent across commodities. This marks a welcome correction and signals improving conditions for New Zealand processors.
Whole Milk Powder
Whole milk powder recorded a five percent rise, a strong performance given that New Zealand milk production for both December and January has been trending upward. Despite abundant supply, demand has outpaced production, adding momentum to the market.
Skim Milk Powder Surges
Skim milk powder, a commodity that often moves quietly, became a standout performer with a ten percent jump in this auction following a positive result at the previous event. Multiple regions have been short on supply, driving buyers back into the market and elevating prices.
This renewed energy may continue into the winter months when supply typically contracts, suggesting the market could remain firm in the near term.
Butter and AMF Show Signs of Recovery
Butter and anhydrous milk fat (AMF) performance varied by region:
- EU: Conditions remain bearish, with adequate product available.
- US: Fat supply remains abundant and domestic demand subdued, keeping export butter competitively priced compared to the EU and New Zealand. However, recent strengthening on the CME suggests supply is being absorbed and the market may be stabilising.
- New Zealand and Australia: Both markets saw positive results, including an eight percent rise in butter. Prices appear to have recovered from December lows and are now back to levels seen in November, marking the third consecutive GDT increase.
Supply is expected to tighten entering winter, which may support further upward pricing.
Cheese Market Remains Mixed
Cheese markets continue to vary:
- EU: Stable milk supply and balanced demand are keeping prices steady.
- US: Domestic demand remains weak and export volumes comparatively high, creating a bearish environment.
- Australia and New Zealand: Conditions are balanced, pointing to a stable pricing outlook for the next three to six months.
Protein Markets Stay Strong
Protein demand, including whey protein, remains robust and continues to outstrip supply. Recent presentations highlighted the strength of global appetites for proteins, and this dynamic has not shifted in the past week. Strong pricing is expected to hold for at least the next three to six months.
The dairy sector has opened February with renewed energy. Strong global demand across several key commodities is helping drive pricing upward despite healthy milk production in some regions. With seasonal shifts ahead, especially reduced supply into winter, the next few months may bring further firmness in several markets.
Thanks for tuning into this Inside Track update, and look after one another until the next edition in a fortnight.
