Global dairy prices have started the new year the same way they finished 2023 with a rise.
The Global Dairy Trade (GDT) price index was up 1.2 per cent at the auction on January 2.
This followed a 2.3pc increase at the December 19 event.
But both events saw mixed results with some commodities lifting, while others fell.
The big winner on January 2 was whole milk powder, up 2.5pc on top of the 2.9pc gain in the pre-Christmas event.
Butter was also strong, up 2.1pc on January 2 and 9.9pc on December 19.
Cheddar was down 2.4pc on January 2, wiping out some of the 6.9pc lift pre-Christmas.
Skim milk powder continued the downward trend, falling 0.9pc on January 2 and 1.3pc on December 19.
Prices highest since June
Westpac NZ chief economist Kelly Eckhold said overall prices now sat at their highest since June.
"Prices have lifted by around 21pc since this year's low in August," he said.
"Overall prices are now down just 3pc on a year ago, 7pc below their five-year average levels and broadly in line with the 10-year average."
Mr Eckhold said expectations of reduced production data in NZ and offshore appeared to be supporting prices.
But he warned although there was improved demand from China, Westpac remained cautious on prospects for the Chinese economy and associated Chinese dairy demand.
ASB economist Nat Keall said prices for both whole milk powder and the GDT index were now roughly at or even slightly above their averages.
He also noted China was also still proving relatively absent from the auctions.
"While Chinese WMP inventories have eased and the domestic economic outlook is looking brighter, it's worth remembering that the Chinese economy is still expected to grow at a below-trend rate next year - not a particularly conducive environment for dairy prices," he said.
"While there may be a limit to how far prices will rise without a more sustained increase in Chinese demand, interest from other regions - namely south-east Asia and the Middle East - is still clearly proving strong enough to support prices."
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Carlene Dowie
Carlene Dowie is the editor of the Australian Dairyfarmer magazine and has more than 30 years' experience as a rural journalist.
Carlene Dowie is the editor of the Australian Dairyfarmer magazine and has more than 30 years' experience as a rural journalist.
