A pickup in demand for milk products in China and other parts of Asia has sparked a rebound in global dairy prices, improving the profit outlook for farmers from New Zealand to the U.S.
Expectations of lower demand for many commodities during the coronavirus pandemic helped push dairy prices to an 18-month low in May. Since then, the Global Dairy Trade price index has risen 11% and is now back to near levels seen in January, before the contagious respiratory virus began spreading globally.
The price index covers products including butter, cheddar cheese, skim-milk powder and whole-milk powder, and is calculated from international auctions that are conducted twice a month. Dairy producers and processing companies all over the world participate in these auctions, and the index is also used to help price dairy exports.