Dairy prices jump 6.3% in first GDT auction of 2026; Wall St keeps rallying
Nvidia chief Jensen Huang had a note of caution for cooling systems.
Milk processors Fonterra Cooperative Group and Synlait Milk will be top of local investors’ minds after dairy prices jumped 6.3% in the first Global Dairy Trade auction of the year, snapping a run of nine declines, while Nestle recalled some batches of its SMA baby formula in the UK over fears of contamination.
Stocks in the US and Europe extended their strong start to the year as a soft services activity reading reaffirmed expectations the Federal Reserve will cut its benchmark interest rate and investors largely shrugged off the heightened geopolitical risks after the US ousting of Venezuela’s president Nicolas Maduro.
Tech stocks remained firm as companies showed off their wares at the Consumer Electronics Show in Las Vegas, where Nvidia chief executive Jensen Huang said his firm’s next generation of chip is in full production and that water chillers won’t be needed for data centres, knocking suppliers such as Johnson Controls International.
And the kiwi dollar fell toa 12-and-a-half year low against the Aussie ahead of inflation figures across the Tasman, which are expected to show consumer price rises remain elevated, raising the chance of an early rate hike by the Reserve Bank of Australia.
Milking it
The GDT price index jumped 6.3% at the first Global Dairy Trade auction of 2026, snapping nine straight declines through last year, for an average winning price of US$3,533 a tonne. Whole milk powder prices climbed 7.2% to US$3,407 a tonne, although gains were widespread as anhydrous milk fat advanced 7.4% to US$6,011 a tonne.
Fonterra Shareholders’ Fund units climbed 59% in 2025 in their best year since listing in 2012, while Synlait Milk’s shoring up of its balance sheet saw a 47% recovery in its shares through the year.
New Zealand’s primary industries were a major component in softening the edges of its protracted downturn, and Fonterra dairy farmers are poised for a windfall in the coming months once France’s Lactalis buys the milk processor’s Mainland consumer business.
Meanwhile, Swiss food giant Nestle dipped after recalling some SMA baby formula batches in the UK over fears they were contaminated with bacteria.
Stocks on Wall Street extended their gains after the ISM services gauge was weaker than expected, fuelling expectations the Federal Reserve will continue to cut interest rates to support the world’s biggest economy.
The Dow Jones Industrial Average hit a new record as it gained 0.9% in late trading, with Amazon, UnitedHealth Group and Sherwin Williams leading the blue chip index higher, while the S&P 500 rose 0.6% and the tech-heavy Nasdaq Composite advanced 0.4%.
Cool it
Tech stocks were in focus as firms revealed new product lines at the Consumer Electronics Show in Las Vegas.
Nvidia edged higher after chief executive Jensen Huang said the next generation of chip is in full production, with the Vera Rubin platform expected to debut later this year. Huang said no water chillers will be needed for data centres, which weighed on cooling systems makers such as Johnson Controls International, which dropped 6.1%.
Chevron gave back some of the prior day’s gains as investors continue to digest the US toppling of Venezuelan President Nicolas Maduro, with US President Donald Trump seeking to take control of the Latin American nation and encourage American oil companies to re-enter the territory to rebuild its energy infrastructure.
Brent crude oil futures were down 0.9% at US$61.18 a barrel.
European stock markets were also stronger, with retailer Next pacing a 1.2% gain on the UK’s FTSE 100 after the company raised its outlook for the coming year. Germany’s DAX 30 increased 0.1% and France’s CAC 40 gained 0.3%.
Australian future are pointing to a 0.4% gain for the S&P/ASX 200 index when trading opens across the Tasman, while the New Zealand dollar traded at 57.83 US cents at 7am in Auckland from 57.98 cents yesterday.
The kiwi fell to 85.86 Australian cents from 86.24 cents, having touched its lowest point against its trans-Tasman pair since September 2013. The neighbouring nations are on potentially diverging interest rate paths, with Australian inflation data due today expected to show rising price pressure for consumers, which may spur on the Reserve Bank of Australia to raise its key rate sooner rather than later.
Meanwhile, New Zealand’s central bank governor Anna Breman talked down expectations for an early hike on this side of the Tasman, reiterating the bank’s forecast for the next move to potentially be lower.
Reporting by Paul McBeth. Image from Leon Ephraïm on Unsplash.
