Executive Summary

Dairy product prices continued to decline during the most recent GDT auction. Highlights include:

• The GDT Price Index declined 2.9%. The GDT Price Index remained at a nine year high seasonal level.
• Declines in prices were widespread across most products offered for the third consecutive event and led by WMP.
• Total quantities sold for all products at the event finished 14.6% above previous year levels, increasing on a YOY basis for the second consecutive month.

Additional Report Details

Dairy product prices declined 2.9% within the Global Dairy Trade (GDT), finishing lower for the fifth consecutive auction and returning to a four month low level. The GDT Price Index represents a weighted-average of the percentage changes in prices between trading events for all products offered.

The GDT Price Index remained 4.1% above previous year price levels. Within the latest auction, declines in prices were widespread across products offered for the third consecutive event with butter (-1.0%), cheddar cheese (-0.1%), whole milk powder (-4.9%), and skim milk powder (-0.6%). Anhydrous milkfat (+0.6%) was the lone rising product. Whole milk powder and skim milk powder combined to account for 79% of all products traded within GDT events throughout the 2021 calendar year.

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 prices for the day prior to the GDT auction. 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 was strong again. Total quantities sold typically reach seasonal high levels throughout the month of November, prior to declining throughout the next several months.

Volumes sold for all products increased 14.6% year over year. Volumes sold for all products are on pace to reach a seven year high seasonal level for the month of May.

U.S. butter prices finished at a premium to GDT winning prices when accounting for differences in butterfat levels as GDT butter prices declined.

U.S. cheddar cheese prices remained at a discount to GDT winning prices, despite GDT cheddar cheese prices declining.

U.S. nonfat dry milk futures prices remained at a discount to GDT skim milk powder winning prices when accounting for differences in protein values, despite GDT skim milk powder prices declining.

GDT equivalent Class III and Class IV milk prices reached values of $26.97/cwt and $25.14/cwt, respectively based on GDT butter, cheddar cheese and skim milk powder prices. The GDT equivalent Class III and Class IV prices each reached four month low levels.

GDT equivalent Class III and Class IV milk prices are currently trading at premiums of $2.08/cwt and $0.30/cwt, respectively, vs. U.S. price levels.