Global Dairy Trade Results Update – 12/15/20
Executive Summary
Dairy product prices continued to increase during the GDT event held Dec 15tht. Highlights from the most recent auction include:
The GDT Price Index finished 1.3% above previous year price levels at the Dec 15th auction, increasing on a YOY basis for just the second time in the past 21 events. The GDT Price Index finished 8.8% above the three year average price for the second auction of December, finishing above three year average figures for the third consecutive event.
Within the latest auction, increases in prices were widespread and led by butter (+6.0%), followed by cheddar cheese (+4.2%), anhydrous milkfat (+1.9%), lactose (+1.5%), skim milk powder (+1.2%) and whole milk powder (+0.5%). Butter milk powder and sweet whey powder were not sold at the Dec 15th 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 14th 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 15th event declined 1.1% from the previous event while remaining 11.3% lower on a YOY basis. The YOY decline in total quantities sold was the 11th experienced in a row. Total quantities sold typically reach seasonal high levels throughout the months of October and November, prior to declining seasonally throughout the month of December.
Volumes sold for all products within the December auctions declined 9.8% from average November volumes sold while finishing 11.4% below last year’s average volumes sold for the month of December. Dec ’20 volumes sold for all products finished 6.1% below three year average seasonal figures, declining to a three year low seasonal level, overall.
U.S. butter prices remained at a discount to GDT winning prices at the Dec 15th event when accounting for differences in butterfat levels as GDT butter prices reached an eight month high level. U.S. spot butter prices are currently trading at a 22.6% discount to GDT prices while CME futures prices traded at a 12.8% discount to GDT prices from Jan ’21 – May ’21. Butter was not sold at the GDT auction for Contract 6 (Jun ’21).
U.S. cheddar cheese prices finished at a slight discount to GDT winning prices at the Dec 15th event as GDT cheddar cheese prices reached a seven month high level. U.S. spot cheddar cheese prices are currently trading at a 13.2% discount to GDT prices while CME futures prices traded at a 0.6% discount to GDT prices from Jan ’21 – May ’21. Cheddar cheese was not sold at the GDT auction for Contract 6 (Jun ’21).
U.S. nonfat dry milk futures prices remained at a discount to GDT skim milk powder winning prices at the Dec 15th event when accounting for differences in protein values as GDT skim milk powder prices reached an 11 month 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 16.0% discount to GDT skim milk powder prices from Jan ’21 – May ’21. Skim milk powder was not sold at the GDT auction for Contract 6 (Jun ’21).
- The GDT Price Index increased 1.3% at the Dec 15th event, finishing higher for the sixth time in the past seven auctions and reaching an 11 month high level.
- Increases in prices within the Dec 15th event were widespread across products offered. Whole milk powder rebounded to a five month high level throughout the Dec 15th event while skim milk powder prices reached an 11 month high. Cheddar cheese prices reached a seven month high level while butter and anhydrous milkfat prices reached eight and ten month high levels, respectively.
- Total quantities sold for all products at the Dec 15th event remained lower on a YOY basis for the 11th consecutive auction, finishing down 11.3%.
The GDT Price Index finished 1.3% above previous year price levels at the Dec 15th auction, increasing on a YOY basis for just the second time in the past 21 events. The GDT Price Index finished 8.8% above the three year average price for the second auction of December, finishing above three year average figures for the third consecutive event.
Within the latest auction, increases in prices were widespread and led by butter (+6.0%), followed by cheddar cheese (+4.2%), anhydrous milkfat (+1.9%), lactose (+1.5%), skim milk powder (+1.2%) and whole milk powder (+0.5%). Butter milk powder and sweet whey powder were not sold at the Dec 15th 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 14th 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 15th event declined 1.1% from the previous event while remaining 11.3% lower on a YOY basis. The YOY decline in total quantities sold was the 11th experienced in a row. Total quantities sold typically reach seasonal high levels throughout the months of October and November, prior to declining seasonally throughout the month of December.
Volumes sold for all products within the December auctions declined 9.8% from average November volumes sold while finishing 11.4% below last year’s average volumes sold for the month of December. Dec ’20 volumes sold for all products finished 6.1% below three year average seasonal figures, declining to a three year low seasonal level, overall.
U.S. butter prices remained at a discount to GDT winning prices at the Dec 15th event when accounting for differences in butterfat levels as GDT butter prices reached an eight month high level. U.S. spot butter prices are currently trading at a 22.6% discount to GDT prices while CME futures prices traded at a 12.8% discount to GDT prices from Jan ’21 – May ’21. Butter was not sold at the GDT auction for Contract 6 (Jun ’21).
U.S. cheddar cheese prices finished at a slight discount to GDT winning prices at the Dec 15th event as GDT cheddar cheese prices reached a seven month high level. U.S. spot cheddar cheese prices are currently trading at a 13.2% discount to GDT prices while CME futures prices traded at a 0.6% discount to GDT prices from Jan ’21 – May ’21. Cheddar cheese was not sold at the GDT auction for Contract 6 (Jun ’21).
U.S. nonfat dry milk futures prices remained at a discount to GDT skim milk powder winning prices at the Dec 15th event when accounting for differences in protein values as GDT skim milk powder prices reached an 11 month 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 16.0% discount to GDT skim milk powder prices from Jan ’21 – May ’21. Skim milk powder was not sold at the GDT auction for Contract 6 (Jun ’21).