Global Dairy Trade Results Update – 9/1/20
Executive Summary
Dairy product prices continued to decline during the GDT event held Sep 1st. Highlights from the most recent auction include:
The GDT Price Index finished 7.5% below previous year price levels at the Sep 1st auction, declining on a YOY basis for the 13th time in the past 14 events. The GDT Price Index finished 8.0% below the three year average price for the first auction of September, finishing below three year average figures for the 15th consecutive event.
Within the latest auction, declines in prices were led by whole milk powder (-2.0%), followed by butter (-1.2%), anhydrous milkfat (-0.5%) and cheddar cheese (-0.4%). The declines more than offset increases in lactose (+0.8%), skim milk powder (+1.8%) and butter milk powder (+3.9%) prices. Sweet whey powder was not sold at the Sep 1st 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 Aug 31st 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 Sep 1st event increased 13.8% from the previous event, reaching an eight month high level but remaining 10.2% lower on a YOY basis. The YOY decline in total quantities sold was the fourth experienced in a row. Total quantities sold typically reach seasonal low levels throughout the months of April and May, prior to rebounding seasonally throughout the next several months.
Volumes sold for all products within the first auction of September increased 11.4% from average August volumes sold but remained 7.4% below last year’s average volumes sold for the month of September. Volumes sold for all products finished 3.9% below three year average seasonal figures, declining to a three year low seasonal level, overall.
U.S. butter prices remained at a premium to GDT winning prices at the Sep 1st event, as GDT butter prices declined to a four year low level. U.S. spot butter prices are currently trading at a 0.8% premium to GDT prices while CME futures prices traded at a 9.6% premium to GDT prices from Oct ’20 – Mar ’21.
U.S. cheddar cheese prices also finished at a premium to GDT winning prices at the Sep 1st event, as GDT cheddar cheese prices declined to a 20 month low level. U.S. spot cheddar cheese prices are currently trading at a 4.0% premium to GDT prices while CME futures prices traded at a 14.1% premium to GDT prices from Oct ’20 – Mar ’21.
U.S. nonfat dry milk (NFDM) futures prices remained at a discount to GDT SMP winning prices at the Sep 1st event, as GDT SMP prices finished higher for the second consecutive auction. U.S. spot NFDM prices are currently trading at a 17.6% discount to GDT SMP prices while CME futures prices traded at a 12.6% discount to GDT SMP prices from Oct ’20 – Feb ’21. SMP was not sold at the GDT auction for Contract 6 (Mar ’21).
- The GDT Price Index declined 1.0% at the Sep 1st event, finishing lower for the fourth consecutive auction and reaching a three month low level, overall.
- Declines in prices within the Sep 1st event were led by whole milk powder, followed by butter, anhydrous milkfat and cheddar cheese. Butter and anhydrous milkfat prices each declined to four year low levels throughout the Sep 1st event while cheddar cheese prices declined to a 20 month low level. Whole milk powder prices declined to a two month low level however skim milk powder prices finished higher for the second consecutive event.
- Total quantities sold for all products at the Sep 1st event increased seasonally to an eight month high level but remained lower on a YOY basis for the fourth consecutive auction, finishing down 10.2%.
The GDT Price Index finished 7.5% below previous year price levels at the Sep 1st auction, declining on a YOY basis for the 13th time in the past 14 events. The GDT Price Index finished 8.0% below the three year average price for the first auction of September, finishing below three year average figures for the 15th consecutive event.
Within the latest auction, declines in prices were led by whole milk powder (-2.0%), followed by butter (-1.2%), anhydrous milkfat (-0.5%) and cheddar cheese (-0.4%). The declines more than offset increases in lactose (+0.8%), skim milk powder (+1.8%) and butter milk powder (+3.9%) prices. Sweet whey powder was not sold at the Sep 1st 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 Aug 31st 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 Sep 1st event increased 13.8% from the previous event, reaching an eight month high level but remaining 10.2% lower on a YOY basis. The YOY decline in total quantities sold was the fourth experienced in a row. Total quantities sold typically reach seasonal low levels throughout the months of April and May, prior to rebounding seasonally throughout the next several months.
Volumes sold for all products within the first auction of September increased 11.4% from average August volumes sold but remained 7.4% below last year’s average volumes sold for the month of September. Volumes sold for all products finished 3.9% below three year average seasonal figures, declining to a three year low seasonal level, overall.
U.S. butter prices remained at a premium to GDT winning prices at the Sep 1st event, as GDT butter prices declined to a four year low level. U.S. spot butter prices are currently trading at a 0.8% premium to GDT prices while CME futures prices traded at a 9.6% premium to GDT prices from Oct ’20 – Mar ’21.
U.S. cheddar cheese prices also finished at a premium to GDT winning prices at the Sep 1st event, as GDT cheddar cheese prices declined to a 20 month low level. U.S. spot cheddar cheese prices are currently trading at a 4.0% premium to GDT prices while CME futures prices traded at a 14.1% premium to GDT prices from Oct ’20 – Mar ’21.
U.S. nonfat dry milk (NFDM) futures prices remained at a discount to GDT SMP winning prices at the Sep 1st event, as GDT SMP prices finished higher for the second consecutive auction. U.S. spot NFDM prices are currently trading at a 17.6% discount to GDT SMP prices while CME futures prices traded at a 12.6% discount to GDT SMP prices from Oct ’20 – Feb ’21. SMP was not sold at the GDT auction for Contract 6 (Mar ’21).