Global Dairy Trade Results Update – 7/21/20
Executive Summary
Dairy product prices declined during the GDT event held Jul 21st. Highlights from the most recent auction include:
The GDT Price Index finished 3.1% below previous year price levels at the Jul 21st auction, declining on a YOY basis for the tenth time in the past 11 events. The GDT Price Index finished 3.4% below the three year average price for the second auction of July, finishing below three year average figures for the 12th consecutive event.
Within the latest auction, declines in prices were led by butter (-4.9%), followed by anhydrous milkfat (-2.8%), lactose (-2.5%) and skim milk powder (-0.5%). The declines more than offset increases in whole milk powder (+0.6%) and cheddar cheese (+0.6%) prices. Butter milk powder and sweet whey powder were not sold at the Jul 21st 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 Jul 20th 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 Jul 21st event declined 6.6% from the previous event while finishing 4.0% lower on a YOY basis. The YOY decline in total quantities sold was just the second experienced throughout the past 14 auctions. Total quantities sold typically reach seasonal low levels throughout the months of April and May, prior to rebounding seasonally throughout next several months.
Volumes sold for all products within the July auctions increased 14.5% from average June volumes sold but remained 0.1% below last year’s average volumes sold for the month of July. Jul ’20 volumes sold for all products finished 5.0% below three year average seasonal figures, declining to an 11 year seasonal low level, overall.
U.S. butter prices remained at a premium to GDT winning prices at the Jul 21st event, as GDT butter prices declined to a three and a half year low level. U.S. spot butter prices are currently trading at a 7.5% premium to GDT prices while CME futures prices traded at a 13.9% premium to GDT prices from Aug ’20 – Jan ’21.
U.S. cheddar cheese prices also finished at a premium to GDT winning prices at the Jul 21st event, despite GDT cheddar cheese prices continuing to rebound from the 16 month low level experienced throughout the first auction of June. U.S. spot cheddar cheese prices are currently trading at a 48.2% premium to GDT prices while CME futures prices traded at a 19.1% premium to GDT prices from Aug ’20 – Jan ’21.
U.S. nonfat dry milk (NFDM) futures prices remained at a discount to GDT SMP winning prices at the Jul 21st event, despite GDT SMP prices declining from the four month high level experienced throughout the previous auction. U.S. spot NFDM prices are currently trading at a 20.9% discount to GDT SMP prices while CME futures prices traded at a 14.9% discount to GDT SMP prices from Sep ’20 – Dec ’20. SMP was not sold at the GDT auction for Contract 1 (Aug ’20) and Contract 6 (Jan ’21).
- The GDT Price Index declined 0.7% at the Jul 21st event, finishing lower for the first time in the past five auctions.
- Declines in prices within the Jul 21st event were led by butter, followed by anhydrous milkfat, lactose and skim milk powder. Butter and anhydrous milkfat prices each declined to three and a half year low levels throughout the Jul 21st event while skim milk powder prices declined from the four month high level experienced throughout the previous event. Whole milk powder prices increased to a six month high level throughout the Jul 21st event, however, while cheddar cheese prices continued to rebound from the 16 month low level experienced throughout the first auction of June.
- Total quantities sold for all products at the Jul 21st event declined contraseasonally from the previous auction while finishing 4.0% lower on a YOY basis. Total volumes sold for all products within the July auctions declined to an 11 year seasonal low level, finishing slightly below the previous year volumes.
The GDT Price Index finished 3.1% below previous year price levels at the Jul 21st auction, declining on a YOY basis for the tenth time in the past 11 events. The GDT Price Index finished 3.4% below the three year average price for the second auction of July, finishing below three year average figures for the 12th consecutive event.
Within the latest auction, declines in prices were led by butter (-4.9%), followed by anhydrous milkfat (-2.8%), lactose (-2.5%) and skim milk powder (-0.5%). The declines more than offset increases in whole milk powder (+0.6%) and cheddar cheese (+0.6%) prices. Butter milk powder and sweet whey powder were not sold at the Jul 21st 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 Jul 20th 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 Jul 21st event declined 6.6% from the previous event while finishing 4.0% lower on a YOY basis. The YOY decline in total quantities sold was just the second experienced throughout the past 14 auctions. Total quantities sold typically reach seasonal low levels throughout the months of April and May, prior to rebounding seasonally throughout next several months.
Volumes sold for all products within the July auctions increased 14.5% from average June volumes sold but remained 0.1% below last year’s average volumes sold for the month of July. Jul ’20 volumes sold for all products finished 5.0% below three year average seasonal figures, declining to an 11 year seasonal low level, overall.
U.S. butter prices remained at a premium to GDT winning prices at the Jul 21st event, as GDT butter prices declined to a three and a half year low level. U.S. spot butter prices are currently trading at a 7.5% premium to GDT prices while CME futures prices traded at a 13.9% premium to GDT prices from Aug ’20 – Jan ’21.
U.S. cheddar cheese prices also finished at a premium to GDT winning prices at the Jul 21st event, despite GDT cheddar cheese prices continuing to rebound from the 16 month low level experienced throughout the first auction of June. U.S. spot cheddar cheese prices are currently trading at a 48.2% premium to GDT prices while CME futures prices traded at a 19.1% premium to GDT prices from Aug ’20 – Jan ’21.
U.S. nonfat dry milk (NFDM) futures prices remained at a discount to GDT SMP winning prices at the Jul 21st event, despite GDT SMP prices declining from the four month high level experienced throughout the previous auction. U.S. spot NFDM prices are currently trading at a 20.9% discount to GDT SMP prices while CME futures prices traded at a 14.9% discount to GDT SMP prices from Sep ’20 – Dec ’20. SMP was not sold at the GDT auction for Contract 1 (Aug ’20) and Contract 6 (Jan ’21).