Executive Summary

Dairy product prices declined slightly during the GDT event held May 18^th. Highlights from the most recent auction include:

• The GDT Price Index declined 0.2% at the May 18^th event, finishing lower for the fourth time in the past five auctions but remaining near recently experienced seven year high levels.
• Declines in prices within the May 18^th event were led by butter, followed by whole milk powder and anhydrous milkfat prices. Butter prices declined to a four month low level throughout the May 18^th event. Skim milk powder prices reached a six and a half year high throughout the May 18^th event while cheddar cheese and lactose prices also finished higher.
• Total quantities sold for all products at the May 18^th event declined seasonally to a 12 month low level but finished 25.9% above previous year figures. May ’21 volumes sold for all products reached a four year high seasonal level.

Additional Report Details

Dairy product prices declined 0.2% within the Global Dairy Trade (GDT) event held May 18^th, finishing lower for the fourth time in the past five 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 42.4% above previous year price levels at the May 18^th auction, reaching an eight year high seasonal level. The GDT Price Index finished 26.7% above the three year average price for the second auction of May, finishing above three year average figures for the 13^th consecutive event.

Within the latest auction, declines in prices were led by butter (-2.2%), followed by whole milk powder (-0.2%) and anhydrous milkfat (-0.1%). Skim milk powder (+0.7%), cheddar cheese (+1.0%) and lactose (+1.6%) prices finished higher throughout the May 18^th event while butter milk powder and sweet whey powder were 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 17^th 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 18^th event declined 4.0% from the previous event, reaching a 12 month low level. Total quantities sold for all products remained 25.9% above previous year figures, however, increasing on a YOY basis for the fifth 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 five 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 May auctions declined 13.9% from average April volumes sold but remained 29.9% above last year’s average volumes sold for the month of May. May ’21 volumes sold for all products reached a four year high seasonal level.

U.S. butter prices remained at a discount to GDT winning prices at the May 18^th event when accounting for differences in butterfat levels, despite GDT butter prices declining to a four month low level. U.S. spot butter prices are currently trading at a 16.4% discount to GDT prices while CME futures prices traded at a 13.8% 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 18^th event as GDT cheddar cheese prices rebounded from the previous event. U.S. spot cheddar cheese prices are currently trading at a 13.7% discount to GDT prices while CME futures prices traded at a 3.4% 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 18^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 an 18.9% discount to GDT skim milk powder prices while CME futures prices traded at a 15.2% discount to GDT skim milk powder prices from Jun ’21 – Nov ’21.