Global Dairy Trade Results Update – 5/19/20
Executive Summary
Dairy product prices rebounded slightly during the GDT event held May 19th. Highlights from the most recent auction include:
The GDT Price Index remained 16.0% below previous year price levels at the May 19th auction, declining on a YOY basis for the seventh consecutive event. The GDT Price Index finished 16.1% below the three year average price for the second auction of May, finishing below three year average figures for the eighth consecutive event.
Within the latest auction, increases in prices were led by lactose (+15.6%), followed by skim milk powder (+6.7%) and anhydrous milkfat (+2.7%). The increases more than offset declines in whole milk powder (-0.5%), butter (-1.9%), rennet casein (-1.9%) and cheddar cheese (-6.0%) prices. Butter milk powder and sweet whey powder were not sold at the May 19th 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 May 18th 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 May 19th event increased 2.1% from the 11 month low level experienced throughout the previous event while finishing 8.2% higher on a YOY basis. Total quantities sold have finished higher on a YOY basis over 10 consecutive auctions through the May 19th event. Total quantities sold typically decline to seasonal low levels throughout the months of April and May.
Volumes sold for all products within the May auctions declined 18.8% from average April volumes sold but finished 7.6% above last year’s average volumes sold for the month of May. May ’20 volumes sold for all products remained 11.3% below three year average seasonal figures, however.
U.S. butter prices finished at a slight premium to GDT winning prices at the May 19th event as GDT butter prices declined to a 17 month low level. U.S. spot butter prices are currently trading at a 4.6% discount to GDT prices however CME futures prices traded at a 1.5% premium to GDT prices from Jun ’20 – Nov ’20.
U.S. cheddar cheese prices remained at a slight discount to GDT winning prices at the May 19th event, despite GDT cheddar cheese prices declining to a five month low level. U.S. spot cheddar cheese prices are currently trading at a 1.3% premium to GDT prices however CME futures prices traded at a 1.6% discount to GDT prices from Jun ’20 – Oct ’20. Cheddar cheese was not sold at the GDT auction for Contract 3 (Aug ’20) and Contract 6 (Nov ’20).
U.S. nonfat dry milk (NFDM) futures prices also remained at a discount to GDT SMP winning prices at the May 19th event as GDT SMP prices rebounded to a two month high level. U.S. spot NFDM prices are currently trading at a 21.0% discount to GDT SMP prices while CME futures prices traded at a 16.1% discount to GDT SMP prices from Jun ’20 – Oct ’20. SMP was not sold at the GDT auction for Contract 6 (Nov ’20).
- The GDT Price Index increased 1.0% at the May 19th event, rebounding from the 16 month low level experienced throughout the previous auction. The increase experienced within the GDT Price Index was just the second in the past eight auctions.
- Increases in prices within the May 19th event were led by lactose, followed by skim milk powder and anhydrous milkfat. Skim milk powder prices rebounded from the ten month low level experienced throughout the previous event while anhydrous milkfat prices rebounded from a three and a half year low level. Whole milk powder and butter prices declined slightly throughout the May 19th event, however, each reaching 17 month low levels, while cheddar cheese prices declined to a five month low level.
- Total quantities sold for all products at the May 19th event remained higher on a YOY basis for the tenth consecutive event, finishing up 8.2%.
The GDT Price Index remained 16.0% below previous year price levels at the May 19th auction, declining on a YOY basis for the seventh consecutive event. The GDT Price Index finished 16.1% below the three year average price for the second auction of May, finishing below three year average figures for the eighth consecutive event.
Within the latest auction, increases in prices were led by lactose (+15.6%), followed by skim milk powder (+6.7%) and anhydrous milkfat (+2.7%). The increases more than offset declines in whole milk powder (-0.5%), butter (-1.9%), rennet casein (-1.9%) and cheddar cheese (-6.0%) prices. Butter milk powder and sweet whey powder were not sold at the May 19th 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 May 18th 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 May 19th event increased 2.1% from the 11 month low level experienced throughout the previous event while finishing 8.2% higher on a YOY basis. Total quantities sold have finished higher on a YOY basis over 10 consecutive auctions through the May 19th event. Total quantities sold typically decline to seasonal low levels throughout the months of April and May.
Volumes sold for all products within the May auctions declined 18.8% from average April volumes sold but finished 7.6% above last year’s average volumes sold for the month of May. May ’20 volumes sold for all products remained 11.3% below three year average seasonal figures, however.
U.S. butter prices finished at a slight premium to GDT winning prices at the May 19th event as GDT butter prices declined to a 17 month low level. U.S. spot butter prices are currently trading at a 4.6% discount to GDT prices however CME futures prices traded at a 1.5% premium to GDT prices from Jun ’20 – Nov ’20.
U.S. cheddar cheese prices remained at a slight discount to GDT winning prices at the May 19th event, despite GDT cheddar cheese prices declining to a five month low level. U.S. spot cheddar cheese prices are currently trading at a 1.3% premium to GDT prices however CME futures prices traded at a 1.6% discount to GDT prices from Jun ’20 – Oct ’20. Cheddar cheese was not sold at the GDT auction for Contract 3 (Aug ’20) and Contract 6 (Nov ’20).
U.S. nonfat dry milk (NFDM) futures prices also remained at a discount to GDT SMP winning prices at the May 19th event as GDT SMP prices rebounded to a two month high level. U.S. spot NFDM prices are currently trading at a 21.0% discount to GDT SMP prices while CME futures prices traded at a 16.1% discount to GDT SMP prices from Jun ’20 – Oct ’20. SMP was not sold at the GDT auction for Contract 6 (Nov ’20).