Global Dairy Trade Results Update – 10/1/19
Executive Summary
Dairy product prices increased slightly during the GDT event held Oct 1st. Highlights from the most recent auction include:
The GDT Price Index finished 12.4% above previous year price levels at the Oct 1st event, increasing on a YOY basis for the seventh consecutive event. The GDT Price Index also finished 7.1% above the three year average price for the first auction of October, finishing above three year average figures for the 19th consecutive event.
Within the latest auction, increases in prices were led by butter milk powder (+6.7%), followed by skim milk powder (+2.7%), lactose (+1.8%) and rennet casein (+0.7%). The increases more than offset lower cheddar cheese (-3.4%), whole milk powder (-0.2%) and butter (-0.2%) prices. Anhydrous milkfat prices finished flat while sweet whey powder was not sold at the Oct 1st 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 Sep 30th 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 Oct 1st event of 38,716 MT increased 3.7% from the previous event but remained 7.8% lower on a YOY basis. The YOY decline in total quantities sold was the second experienced in a row.
Volumes sold for all products within the first auction of October increased seasonally by 0.5% from average September volumes sold but finished 7.7% below last year’s average volumes sold for the month of October. Oct ’19 volumes sold for all products remained 4.1% above three year average seasonal figures, however.
U.S. butter prices remained at a significant premium to GDT winning prices at the Oct 1st event as GDT butter prices declined slightly. U.S. spot butter prices are currently trading at a 16.5% premium to GDT prices while CME futures prices traded at a 20.0% premium to GDT prices from Nov ’19 – Apr ’20.
U.S. cheddar cheese prices also remained at a premium to GDT winning prices at the Oct 1st event as GDT cheddar cheese prices declined to a seven month low level. U.S. spot cheddar cheese prices are currently trading at an 8.2% premium to GDT prices while CME futures prices traded at a 4.5% premium to GDT prices from Nov ’19 – Mar ’20. Cheddar cheese was not sold at the GDT auction for Contract 6 (Apr ’20).
U.S. nonfat dry milk (NFDM) futures prices remained at a discount to GDT winning prices at the Oct 1st event as GDT SMP prices increased to a four and a half year high level. U.S. spot NFDM prices are currently trading at an 11.1% discount to GDT prices while CME futures prices traded at an 8.2% discount to GDT prices from Nov ’19 – Mar ’20. SMP was not sold at the GDT auction for Contract 6 (Apr ’20).
- The GDT Price Index increased 0.2% at the Oct 1st event, finishing higher for the second consecutive event and reaching a five auction high, overall.
- Increases in prices within the Oct 1st event were led by butter milk powder, followed by skim milk powder, lactose and rennet casein. Skim milk powder prices reached a four and a half year high level throughout the Oct 1st event. Cheddar cheese prices declined to a seven month low level throughout the Oct 1st event, however, while whole milk powder and butter prices finished slightly lower.
- Total quantities sold for all products at the Oct 1st event increased 3.7% from the previous event but remained 7.8% lower on a YOY basis. Volumes sold for all products within the first auction of October finished 7.7% below last year’s average volumes sold for the month of October but remained 4.1% above three year average seasonal figures.
The GDT Price Index finished 12.4% above previous year price levels at the Oct 1st event, increasing on a YOY basis for the seventh consecutive event. The GDT Price Index also finished 7.1% above the three year average price for the first auction of October, finishing above three year average figures for the 19th consecutive event.
Within the latest auction, increases in prices were led by butter milk powder (+6.7%), followed by skim milk powder (+2.7%), lactose (+1.8%) and rennet casein (+0.7%). The increases more than offset lower cheddar cheese (-3.4%), whole milk powder (-0.2%) and butter (-0.2%) prices. Anhydrous milkfat prices finished flat while sweet whey powder was not sold at the Oct 1st 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 Sep 30th 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 Oct 1st event of 38,716 MT increased 3.7% from the previous event but remained 7.8% lower on a YOY basis. The YOY decline in total quantities sold was the second experienced in a row.
Volumes sold for all products within the first auction of October increased seasonally by 0.5% from average September volumes sold but finished 7.7% below last year’s average volumes sold for the month of October. Oct ’19 volumes sold for all products remained 4.1% above three year average seasonal figures, however.
U.S. butter prices remained at a significant premium to GDT winning prices at the Oct 1st event as GDT butter prices declined slightly. U.S. spot butter prices are currently trading at a 16.5% premium to GDT prices while CME futures prices traded at a 20.0% premium to GDT prices from Nov ’19 – Apr ’20.
U.S. cheddar cheese prices also remained at a premium to GDT winning prices at the Oct 1st event as GDT cheddar cheese prices declined to a seven month low level. U.S. spot cheddar cheese prices are currently trading at an 8.2% premium to GDT prices while CME futures prices traded at a 4.5% premium to GDT prices from Nov ’19 – Mar ’20. Cheddar cheese was not sold at the GDT auction for Contract 6 (Apr ’20).
U.S. nonfat dry milk (NFDM) futures prices remained at a discount to GDT winning prices at the Oct 1st event as GDT SMP prices increased to a four and a half year high level. U.S. spot NFDM prices are currently trading at an 11.1% discount to GDT prices while CME futures prices traded at an 8.2% discount to GDT prices from Nov ’19 – Mar ’20. SMP was not sold at the GDT auction for Contract 6 (Apr ’20).