Executive Summary

Dairy product prices declined slightly during the GDT event held May 4^th. Highlights from the most recent auction include:

• The GDT Price Index declined 0.7% at the May 4^th event, finishing lower for the third time in the past four auctions but remaining near recently experienced seven year high levels.
• Declines in prices within the May 4^th event were led by butter, followed by cheddar cheese, anhydrous milkfat and lactose. Butter prices declined to a three month low level throughout the May 4^th event. Whole milk powder prices finished higher for the third consecutive event while skim milk prices also strengthened throughout the May 4^th event, reaching a six and a half year high level.
• Total quantities sold for all products at the May 4^th event declined seasonally to a ten month low level but finished 33.9% above previous year figures. May ’21 volumes sold for all products are on pace to reach a six year high seasonal level.

Additional Report Details

Dairy product prices declined 0.7% within the Global Dairy Trade (GDT) event held May 4^th, finishing lower for the third time in the past four auctions but remaining near recently experienced seven year high levels. 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 44.1% above previous year price levels at the May 4^th auction, reaching an eight year high seasonal level. The GDT Price Index finished 27.6% above the three year average price for the first auction of May, finishing above three year average figures for the 12^th consecutive event.

Within the latest auction, declines in prices were led by butter (-12.1%), followed by cheddar cheese (-4.5%), anhydrous milkfat (-4.2%) and lactose (-2.0%). Whole milk powder (+0.7%), skim milk powder (+2.0%) and butter milk powder (+14.4%) prices finished higher throughout the May 4^th event while sweet whey powder was not sold.

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 3^rd 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 4^th event declined 12.1% from the previous event, reaching a ten month low level. Total quantities sold for all products remained 33.9% above previous year figures, however, increasing on a YOY basis for the fourth consecutive auction. Total quantities sold had finished lower on a YOY basis over 16 consecutive events through the first auction of March, prior to increasing on a YOY basis throughout the four most recent auctions. Total quantities sold typically reach seasonal high levels throughout the months of October and November, prior to declining seasonally throughout the months of December – May.

Volumes sold for all products within the first auction of May declined 12.2% from average April volumes sold but remained 32.5% above last year’s average volumes sold for the month of May. May ’21 volumes sold for all products are on pace to reach a six year high seasonal level.

U.S. butter prices remained at a discount to GDT winning prices at the May 4^th event when accounting for differences in butterfat levels, despite GDT butter prices declining sharply from the previous auction, reaching a three month low level. U.S. spot butter prices are currently trading at a 21.3% discount to GDT prices while CME futures prices traded at an 18.1% discount to GDT prices from Jun ’21 – Nov ’21.

U.S. cheddar cheese prices remained at a discount to GDT winning prices at the May 4^th event, despite GDT cheddar cheese prices declining from the 12 month high level experienced throughout the previous event. U.S. spot cheddar cheese prices are currently trading at a 6.8% discount to GDT prices while CME futures prices traded at a 2.1% discount to GDT prices during Sep ’21 – Nov ’21. Cheddar cheese was only sold at the GDT auction for Contracts 4, 5 and 6.

U.S. nonfat dry milk futures prices remained at a discount to GDT skim milk powder winning prices at the May 4^th event when accounting for differences in protein values as GDT skim milk powder prices increased to a six and a half year high level. U.S. spot nonfat dry milk prices are currently trading at a 17.7% discount to GDT skim milk powder prices while CME futures prices traded at a 14.7% discount to GDT skim milk powder prices from Jun ’21 – Nov ’21.