Global Dairy Trade Results Update – 1/7/20
Executive Summary
Dairy product prices increased during the GDT event held Jan 7th. Highlights from the most recent auction include:
The GDT Price Index finished 14.8% above previous year price levels at the Jan 7th event, increasing on a YOY basis for the 13th consecutive event. The GDT Price Index also finished 7.9% above the three year average price for the first auction of January, finishing above three year average figures for the 25th consecutive event. The GDT Price Index finished at a six year high seasonal level, overall.
Within the latest auction, increases in prices were widespread across products offered, led by rennet casein (+8.6%), followed by butter milk powder (+7.4%), skim milk powder (+5.4%), butter (+3.7%), cheddar cheese (+3.7%), anhydrous milkfat (+2.3%), lactose (+2.1%) and whole milk powder (+1.7%). Sweet whey powder was not sold at the Jan 7th event.
The table below provides a summary of the most recent GDT weighted average winning prices for key products. Butter has been adjusted to 80% butterfat and skim milk powder (SMP) has been adjusted to 35% protein content (equivalent to U.S. nonfat dry milk) in the $/lb columns below. CME spot and average futures prices are based on Jan 6th figures. CME average futures prices are weighted average prices based on the most recently reported percentage of the total quantity sold in each GDT contract period.
Total quantities sold for all products at the Jan 7th event of 33,050 MT declined 7.5% from the previous event but finished 15.4% higher on a YOY basis. The YOY increase in total quantities sold was the first experienced throughout the past eight events.
Volumes sold for all products within the first auction of January declined 8.2% from average December volumes sold but finished 16.9% above last year’s average volumes sold for the month of January. Jan ’20 volumes sold for all products are on pace to finish 32.5% above three year average seasonal figures, reaching a six year seasonal high level.
U.S. butter prices remained at a significant premium to GDT winning prices at the Jan 7th event, despite GDT butter prices rebounding to a three auction high level. U.S. spot butter prices are currently trading at a 6.3% premium to GDT prices while CME futures prices traded at a 17.4% premium to GDT prices from Feb ’20 – Jun ’20. Butter was not sold at the GDT auction for Contract 6 (Jul ’20).
U.S. cheddar cheese prices finished at a slight discount to GDT winning prices at the Jan 7th event as GDT cheddar cheese prices increased to a 15 auction high level. U.S. spot cheddar cheese prices are currently trading at a 3.3% discount to GDT prices while CME futures prices traded at a 1.0% discount to GDT prices from Feb ’20 – Jun ’20. Cheddar cheese was not sold at the GDT auction for Contract 6 (Jul ’20).
U.S. nonfat dry milk (NFDM) futures prices remained at a discount to GDT winning prices at the Jan 7th event as GDT SMP prices rebounded to the second highest level experienced throughout the past five years. U.S. spot NFDM prices are currently trading at a 12.8% discount to GDT prices while CME futures prices traded at a 14.6% discount to GDT prices from Feb ’20 – Jun ’20. SMP was not sold at the GDT auction for Contract 6 (Jul ’20).
- The GDT Price Index increased 2.8% at the Jan 7th event, finishing higher for the first time in the past three auctions. The GDT Price Index reached a six year high seasonal level, finishing higher on a YOY basis for the 13th consecutive event.
- Increases in prices within the Jan 7th event were widespread across all products offered. Skim milk powder prices rebounded to the second highest level experienced throughout the past five years while cheddar cheese prices increased to a 15 auction high level. Butter and anhydrous milkfat prices each reached three auction high levels while whole milk powder prices rebounded from the seven auction low experienced throughout the previous event.
- Total quantities sold for all products at the Jan 7th event declined seasonally from the previous auction but finished higher on a YOY basis for the first time in the past eight auctions. Volumes sold for all products within the first auction of January finished 16.9% above last year’s average volumes sold for the month of January and 32.5% above three year average seasonal figures.
The GDT Price Index finished 14.8% above previous year price levels at the Jan 7th event, increasing on a YOY basis for the 13th consecutive event. The GDT Price Index also finished 7.9% above the three year average price for the first auction of January, finishing above three year average figures for the 25th consecutive event. The GDT Price Index finished at a six year high seasonal level, overall.
Within the latest auction, increases in prices were widespread across products offered, led by rennet casein (+8.6%), followed by butter milk powder (+7.4%), skim milk powder (+5.4%), butter (+3.7%), cheddar cheese (+3.7%), anhydrous milkfat (+2.3%), lactose (+2.1%) and whole milk powder (+1.7%). Sweet whey powder was not sold at the Jan 7th event.
The table below provides a summary of the most recent GDT weighted average winning prices for key products. Butter has been adjusted to 80% butterfat and skim milk powder (SMP) has been adjusted to 35% protein content (equivalent to U.S. nonfat dry milk) in the $/lb columns below. CME spot and average futures prices are based on Jan 6th figures. CME average futures prices are weighted average prices based on the most recently reported percentage of the total quantity sold in each GDT contract period.
Total quantities sold for all products at the Jan 7th event of 33,050 MT declined 7.5% from the previous event but finished 15.4% higher on a YOY basis. The YOY increase in total quantities sold was the first experienced throughout the past eight events.
Volumes sold for all products within the first auction of January declined 8.2% from average December volumes sold but finished 16.9% above last year’s average volumes sold for the month of January. Jan ’20 volumes sold for all products are on pace to finish 32.5% above three year average seasonal figures, reaching a six year seasonal high level.
U.S. butter prices remained at a significant premium to GDT winning prices at the Jan 7th event, despite GDT butter prices rebounding to a three auction high level. U.S. spot butter prices are currently trading at a 6.3% premium to GDT prices while CME futures prices traded at a 17.4% premium to GDT prices from Feb ’20 – Jun ’20. Butter was not sold at the GDT auction for Contract 6 (Jul ’20).
U.S. cheddar cheese prices finished at a slight discount to GDT winning prices at the Jan 7th event as GDT cheddar cheese prices increased to a 15 auction high level. U.S. spot cheddar cheese prices are currently trading at a 3.3% discount to GDT prices while CME futures prices traded at a 1.0% discount to GDT prices from Feb ’20 – Jun ’20. Cheddar cheese was not sold at the GDT auction for Contract 6 (Jul ’20).
U.S. nonfat dry milk (NFDM) futures prices remained at a discount to GDT winning prices at the Jan 7th event as GDT SMP prices rebounded to the second highest level experienced throughout the past five years. U.S. spot NFDM prices are currently trading at a 12.8% discount to GDT prices while CME futures prices traded at a 14.6% discount to GDT prices from Feb ’20 – Jun ’20. SMP was not sold at the GDT auction for Contract 6 (Jul ’20).