Global Dairy Prices Climb Again as Demand Regains Momentum

International dairy markets continued their upward trajectory in mid-February, as the latest auction of the Global Dairy Trade (Event 398), held on February 17, 2026, recorded another solid gain. The GDT Price Index increased by 3.6%, pushing the average winning price to USD 4,028 per metric tonne. A total of 22,240 tonnes of product were sold, reflecting renewed confidence among buyers following a prolonged downturn that characterized much of 2025. Auction activity underscored the strengthening sentiment. Of the 167 registered bidders, 105 successfully secured product during nearly four hours of competitive trading across 23 bidding rounds. The strong participation highlights sustained global interest, particularly in core export commodities such as milk powders and dairy fats.

Broad-Based Gains Across Key Products

Although detailed product-level data were not fully disclosed in the official release, broader market reports indicate that the recovery has been widespread. Butter continues to outperform other categories, maintaining strong price momentum. Skim Milk Powder (SMP) and Whole Milk Powder (WMP) have also posted steady gains, supported by firm international demand. Dairy fats and selected specialty products are benefiting from tighter inventories in several producing regions.

Recent auction trends have shown particularly notable increases in SMP and mozzarella, alongside consistent strength in butter and anhydrous milk fat. These movements suggest that buyers are prioritizing essential ingredients amid moderating global supply conditions.

Drivers Behind the Market Rebound

The latest price increases mark a clear shift from late 2025, when global oversupply and weak participation weighed heavily on auction results. During that period, strong milk output in major exporting regions—including New Zealand, Europe, and the United States—put downward pressure on prices.

The current rebound appears to be supported by several emerging factors:

• Strategic Restocking: Buyers in North Asia and the Middle East are returning to secure volumes ahead of seasonal consumption peaks, indicating genuine demand recovery rather than speculative purchasing.
• Tighter Seasonal Supply: As Southern Hemisphere milk production slows seasonally and more milk solids are redirected toward cheese manufacturing, availability of exportable powders has narrowed.
• Strength in Core Commodities: Year-to-date gains in key products such as SMP and WMP have been substantial, signaling that buyers are willing to pay higher prices to secure critical inputs.
• Improving Market Sentiment: Successive positive auctions since early January have contributed to a shift in market psychology, moving from caution toward measured optimism.

Outlook for the Coming Months

In the short term, prices are expected to remain stable or trend upward if demand continues at its current pace and supply constraints persist. Seasonal production slowdowns in exporting regions may further support powder markets. Over the next two to three months, market direction will largely depend on several critical variables. China’s purchasing activity will be closely monitored, as any significant increase in imports from the world’s largest dairy buyer could reinforce upward pressure on prices. Additionally, inventory adjustments in developed markets, along with currency fluctuations and freight costs, will play an important role in shaping trade flows and price competitiveness.

Overall, the outcome of Event 398 reinforces signs of a gradual recovery in global dairy markets following the sharp declines of late 2025. While it may be premature to call it a full structural turnaround, the series of consecutive price gains since January suggests that a new pricing phase may be emerging—one that exporters, processors, and producers will be watching closely in the months ahead.