Global Dairy Trade Results Update – 12/3/19
Executive Summary
Dairy product prices declined slightly during the GDT event held Dec 3rd. Highlights from the most recent auction include:
Despite declining from the previous event, the GDT Price Index remained 23.1% above previous year price levels at the Dec 3rd event, increasing on a YOY basis for the 11th consecutive event. The GDT Price Index also finished 9.6% above the three year average price for the first auction of December, finishing above three year average figures for the 23rd consecutive event. The GDT Price Index finished at a three year high seasonal level, overall.
Within the latest auction, declines in prices were led by anhydrous milkfat (-5.1%), followed by butter (-4.9%). The declines more than offset higher whole milk powder (+0.1%), butter milk powder (+1.6%), skim milk powder (+1.9%), cheddar cheese (+2.7%) and rennet casein (+4.9%) prices. Lactose and sweet whey powder were not sold at the Dec 3rd 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 Dec 2nd 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 Dec 3rd event of 36,258 MT declined 4.5% from the previous event while finishing 0.5% lower on a YOY basis. The YOY decline in total quantities sold was the sixth experienced in a row.
Volumes sold for all products within the first auction of December declined 5.4% from average November volumes sold while finishing 0.2% below last year’s average volumes sold for the month of December. Dec ’19 volumes sold for all products remained 23.2% above three year average seasonal figures, however.
U.S. butter prices remained at a significant premium to GDT winning prices at the Dec 3rd event as GDT butter prices declined to a 23 auction low. U.S. spot butter prices are currently trading at an 11.8% premium to GDT prices while CME futures prices traded at a 19.7% premium to GDT prices from Jan ’20 – May ’20. Butter was not sold at the GDT auction for Contract 6 (Jun ’20).
U.S. cheddar cheese prices also remained at a premium to GDT winning prices at the Dec 3rd event, despite GDT cheddar cheese prices increasing to a five auction high. U.S. spot cheddar cheese prices are currently trading at a 21.6% premium to GDT prices while CME futures prices traded at a 7.7% premium to GDT prices from Jan ’20 – May ’20. Cheddar cheese was not sold at the GDT auction for Contract 6 (Jun ’20).
U.S. nonfat dry milk (NFDM) futures prices remained at a discount to GDT winning prices at the Dec 3rd event, however, as GDT SMP prices increased to a five year high level. U.S. spot NFDM prices are currently trading at an 11.9% discount to GDT prices while CME futures prices traded at a 12.6% discount to GDT prices from Jan ’20 – May ’20. SMP was not sold at the GDT auction for Contract 6 (Jun ’20).
- The GDT Price Index declined 0.5% at the Dec 3rd event, finishing lower for the first time in the past six auctions.
- Declines in prices within the Dec 3rd event were led by anhydrous milkfat, followed by butter. Anhydrous milkfat prices reached a 12 month low level throughout the Dec 3rd event while butter prices finished at an 11 month low. Skim milk powder prices reached a five year high level throughout the Dec 3rd event, however, finishing higher for the seventh consecutive auction, while whole milk powder prices increased to a three year high level. Cheddar cheese prices increased to a five auction high throughout the Dec 3rd event.
- Total quantities sold for all products at the Dec 3rd event declined seasonally from the previous auction while remaining lower on a YOY basis for the sixth consecutive event. Volumes sold for all products within the first auction of December finished 0.2% below last year’s average volumes sold for the month of December but remained 23.2% above three year average seasonal figures.
Despite declining from the previous event, the GDT Price Index remained 23.1% above previous year price levels at the Dec 3rd event, increasing on a YOY basis for the 11th consecutive event. The GDT Price Index also finished 9.6% above the three year average price for the first auction of December, finishing above three year average figures for the 23rd consecutive event. The GDT Price Index finished at a three year high seasonal level, overall.
Within the latest auction, declines in prices were led by anhydrous milkfat (-5.1%), followed by butter (-4.9%). The declines more than offset higher whole milk powder (+0.1%), butter milk powder (+1.6%), skim milk powder (+1.9%), cheddar cheese (+2.7%) and rennet casein (+4.9%) prices. Lactose and sweet whey powder were not sold at the Dec 3rd 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 Dec 2nd 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 Dec 3rd event of 36,258 MT declined 4.5% from the previous event while finishing 0.5% lower on a YOY basis. The YOY decline in total quantities sold was the sixth experienced in a row.
Volumes sold for all products within the first auction of December declined 5.4% from average November volumes sold while finishing 0.2% below last year’s average volumes sold for the month of December. Dec ’19 volumes sold for all products remained 23.2% above three year average seasonal figures, however.
U.S. butter prices remained at a significant premium to GDT winning prices at the Dec 3rd event as GDT butter prices declined to a 23 auction low. U.S. spot butter prices are currently trading at an 11.8% premium to GDT prices while CME futures prices traded at a 19.7% premium to GDT prices from Jan ’20 – May ’20. Butter was not sold at the GDT auction for Contract 6 (Jun ’20).
U.S. cheddar cheese prices also remained at a premium to GDT winning prices at the Dec 3rd event, despite GDT cheddar cheese prices increasing to a five auction high. U.S. spot cheddar cheese prices are currently trading at a 21.6% premium to GDT prices while CME futures prices traded at a 7.7% premium to GDT prices from Jan ’20 – May ’20. Cheddar cheese was not sold at the GDT auction for Contract 6 (Jun ’20).
U.S. nonfat dry milk (NFDM) futures prices remained at a discount to GDT winning prices at the Dec 3rd event, however, as GDT SMP prices increased to a five year high level. U.S. spot NFDM prices are currently trading at an 11.9% discount to GDT prices while CME futures prices traded at a 12.6% discount to GDT prices from Jan ’20 – May ’20. SMP was not sold at the GDT auction for Contract 6 (Jun ’20).