The last trading session of the dairy trading floor „Global Dairy Trade“ (GDT) on 4 October was upbeat – the GDT index rose by 3.7% – to 1264 points. This is the highest level since 5 July 2022, when the index stood at 1287 points.

This is the second trading session in a row where the GDT has shown impressive growth. In the last decade, the GDT index was up 1.4 percent.

Lactose (+17.7%) and skimmed and whole milk flour (+4.7% and +4.1% respectively) were the most expensive products during the last trading session. Cheddar cheese (+3.7%) and butter (+3.4%) also increased in price. Buttermilk rose by +2.4%.

Only Mozzarella cheese (-0.1%) and butter flour (-0.4%) showed slight decreases this time.

The rise of the GDT index on the global market is, in general, a very positive signal for all market players, from dairy producers to processors. This means that farmers can expect an increase in farm-gate milk prices in the near future. How much depends on the individual country situation, the market players' conjuncture and other factors.

According to the European Commission, in January, the average buying-in price for raw milk in Lithuania was €56.98 per 100 kg. This is the fifth highest among all European Union countries, so milk producers should hardly complain and complain.

In addition, the upward trend in the GDT index is encouraging, as dairy products will continue to become more expensive on the global market, which in turn means that milk purchase prices should increase further.

It is, however, very likely that the GDT index may decline in the next trading session, as price corrections are normal. Be that as it may, the GDT index still has considerable upside potential (at least 250-350 points). This is suggested by the multi-year chart of the GDT index itself. Market growth can take about 1-1.5 years, depending on the dynamics of the last correction.

The last upward cycle lasted 22 months, followed by an 18-month price correction. This upturn is now 18 months, but it may last longer than the previous market upturn. Be that as it may, dairy market participants need to be aware that there will be short-term corrections in one direction or the other, both during market upswings and downturns. And market participants need to be prepared for this. However, for the time being, the trend is quite positive.

„Global Dairy Trade“ is owned by the New Zealand dairy cooperative „Fonterra“. Trends in the Oceania area will reach Europe in about 1.5-2 months.