Dairy prices rise for second consecutive Global Dairy Trade auction

Dry spring conditions and festive season restocking push average price up 2.5% to US$4021 per tonne

By LineZotpaper

Published20 October 2026

Read Time2 min

The average price of dairy products rose 2.5% at the Global Dairy Trade auction overnight, reaching US$4021 (NZ$7075) per tonne, as dry spring conditions in New Zealand and expectations of an El Niño event supported the second consecutive price increase.

The auction result follows a 1.2% rise in mid-September and comes amid signs that New Zealand's milk production growth is slowing, despite a record September collection and a 1.9% increase in milk solids.

In a note released after the auction, New Zealand Exchange dairy analyst Rosalind Crickett said the results were "largely to be expected" given the data and prevailing conditions. She noted that New Zealand's North Island regions are experiencing a drier than normal spring, with the risk of an El Niño event in early to mid-summer still being priced in.

Whole-milk powder rose 4.4% to US$3760 (NZ$6616) per tonne, while skim-milk powder increased 3.4% to US$3975 (NZ$6995), its highest level on the platform in four years. Butter fell only slightly, down 0.4% to US$4721 (NZ$8309), a smaller decline than initially expected. Cheddar prices dropped sharply, however, falling 7.3% as cheese production rises to meet global demand for whey products, increasing inventories and export volumes.

Crickett also pointed to "last-minute restocking ahead of the festive season" as a possible factor, particularly given potential concerns about product accessibility in coming months amid drought risks and ongoing geopolitical tensions. Strong buyer turnout from North Asia also helped drive the increases, with the region accounting for just over half of total product volume sold.

Analysis

Why This Matters

Dairy is a major New Zealand export, and sustained price increases benefit the broader economy and farm incomes
The combination of dry conditions and potential El Niño threatens future milk production, which could keep prices elevated
Rising cheddar inventories and falling prices highlight shifting demand patterns as global protein markets evolve

Background

The Global Dairy Trade platform hosts auctions every two to three weeks and sets benchmark prices for dairy commodities traded worldwide. New Zealand is the world's largest exporter of whole-milk powder, and its production data is closely watched by global buyers. The current spring season in New Zealand's North Island has been drier than normal, raising concerns about pasture growth and milk yields heading into summer.

Key Perspectives

New Zealand dairy farmers: Higher auction prices are welcome after a period of lower returns, but the dry spring and El Niño risk create uncertainty about production volumes in coming months.

Global buyers (particularly North Asia): Restocking ahead of the festive season and concerns about future product accessibility due to drought and geopolitical tensions drove strong demand, accounting for over half of sales.

Processors and traders: The divergence between powder and fat prices, and the sharp drop in cheddar, point to changing market dynamics that may require adjustments in production and inventory strategies.

What to Watch

Next Global Dairy Trade auction results, scheduled for early November 2026, for confirmation of the upward trend
New Zealand's milk production data for October and November, particularly in North Island regions
El Niño outlook for the coming summer, which could accelerate dry conditions and further tighten supply

Sources

Dry spring conditions see dairy prices lift · RNZ New Zealand Headlines

Checked

12 claims in this story checked against 1 source: 9 supported.

Show each claim

SupportedDairy prices rose for a second consecutive Global Dairy Trade auction.RNZ New Zealand Headlines: “It was the second consecutive auction where prices rose”
SupportedThe average price rose 2.5% to US$4,021 (NZ$7,075) per tonne.RNZ New Zealand Headlines: “The average price rose 2.5 percent at the Global Dairy Trade auction overnight to US$4021 (NZ$7075) a tonne.”
Partly supportedDry spring conditions, El Niño expectations and festive restocking pushed the average price up.RNZ New Zealand Headlines: “Crickett said "last-minute restocking ahead of the festive season" was also a possible factor”
SupportedMilk production growth was slowing despite a record September collection and a 1.9% rise in milk solids.RNZ New Zealand Headlines: “the country had hit a new record for September collections and a 1.9 percent increase in milk solids. "However, the growth trajectory seems to be slowing”
SupportedCrickett said the auction results were “largely to be expected”.RNZ New Zealand Headlines: “In a note, New Zealand Exchange dairy analyst Rosalind Crickett said the results were "largely to be expected".”
Partly supportedNorth Island regions are experiencing a drier-than-normal spring, with El Niño risk in early to mid-summer being priced in.RNZ New Zealand Headlines: “reports on the ground noting that North Island regions appear to be experiencing a drier than normal spring, with risks of El Niño in early-to-mid summer still being priced in in the background”
SupportedWhole-milk powder rose 4.4% to US$3,760 (NZ$6,616) per tonne.RNZ New Zealand Headlines: “the whole-milk powder price increase 4.4 percent to US$3760 (NZ$6616) a tonne.”
SupportedSkim-milk powder rose 3.4% to US$3,975 (NZ$6,995) per tonne.RNZ New Zealand Headlines: “Skim-milk powder was also up 3.4 percent to US$3975 (NZ$6995)”
SupportedSkim-milk powder reached its highest level on the platform in four years.RNZ New Zealand Headlines: “at its highest point on the platform in four years.”
SupportedButter fell 0.4% to US$4,721 (NZ$8,309), a smaller decline than initially expected.RNZ New Zealand Headlines: “butter hadn't declined as far as initially predicted - dropping 0.4 percent to US$4721 (NZ$8309).”
Partly supportedCheddar fell 7.3% as cheese production rose to meet global demand for whey products, while inventories and export volumes increased.RNZ New Zealand Headlines: “With the rise in global protein demand for whey products, a rise in cheese production continues to put downward pressure on cheddar prices, which plummeted -7.3 percent as inventories and export volumes grow.”
SupportedCrickett called “last-minute restocking ahead of the festive season” a possible factor.RNZ New Zealand Headlines: “Crickett said "last-minute restocking ahead of the festive season" was also a possible factor”