Global Dairy Trade Results Update – 1/19/21
Executive Summary
Dairy product prices continued to increase during the GDT event held Jan 19th. Highlights from the most recent auction include:
The GDT Price Index finished 5.5% above previous year price levels at the Jan 19th auction, reaching a seven year high seasonal level. The GDT Price Index finished 11.5% above the three year average price for the second auction of January, finishing above three year average figures for the fifth consecutive event.
Within the latest auction, increases in prices were widespread across products offered with the exception of cheddar cheese. Increases in prices were led by anhydrous milkfat (+17.2%), followed by skim milk powder (+7.0%), lactose (+6.6%), butter (+4.6%) and whole milk powder (+2.2%). Cheddar cheese prices finished slightly lower (-0.3%). Butter milk powder and sweet whey powder were not sold at the Jan 19th 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 Jan 15th 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 Jan 19th event declined 2.3% from the previous event while remaining 10.7% lower on a YOY basis. The YOY decline in total quantities sold was the 13th 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 and January.
Volumes sold for all products within the January auctions declined 6.0% from average December volumes sold while finishing 9.5% below last year’s average volumes sold for the month of January. Jan ’21 volumes sold for all products remained 4.8% above three year average seasonal figures, however.
U.S. butter prices remained at a discount to GDT winning prices at the Jan 19th event when accounting for differences in butterfat levels as GDT butter prices reached a 19 month high level. U.S. spot butter prices are currently trading at a 38.4% discount to GDT prices while CME futures prices traded at a 21.4% discount to GDT prices from Feb ’21 – Jun ’21. Butter was not sold at the GDT auction for Contract 6 (Jul ’21).
U.S. cheddar cheese prices finished at a slight premium to GDT winning prices at the Jan 19th event as GDT cheddar cheese prices declined slightly from recent eight month high levels. U.S. spot cheddar cheese prices are currently trading at an 8.1% discount to GDT prices however CME futures prices traded at a 0.5% premium to GDT prices from Feb ’21 – Jun ’21. Cheddar cheese was not sold at the GDT auction for Contract 6 (Jul ’21).
U.S. nonfat dry milk futures prices remained at a discount to GDT skim milk powder winning prices at the Jan 19th event when accounting for differences in protein values as GDT skim milk powder prices reached a six year high level. U.S. spot nonfat dry milk prices are currently trading at a 20.8% discount to GDT skim milk powder prices while CME futures prices traded at a 19.8% discount to GDT skim milk powder prices from Feb ’21 – Jun ’21. Skim milk powder was not sold at the GDT auction for Contract 6 (Jul ’21).
- The GDT Price Index increased 4.8% at the Jan 19th event, finishing higher for the eighth time in the past nine auctions and reaching a six and a half year high level.
- Increases in prices within the Jan 19th event were widespread across products offered with the exception of cheddar cheese. Whole milk powder and skim milk powder prices reached four and six year high levels, respectively, throughout the Jan 19th event while butter and anhydrous milkfat prices each reached one and a half year high levels. Cheddar cheese prices remained near eight month high levels throughout the Jan 19th event.
- Total quantities sold for all products at the Jan 19th event remained lower on a YOY basis for the 13th consecutive auction, finishing down 10.7%.
The GDT Price Index finished 5.5% above previous year price levels at the Jan 19th auction, reaching a seven year high seasonal level. The GDT Price Index finished 11.5% above the three year average price for the second auction of January, finishing above three year average figures for the fifth consecutive event.
Within the latest auction, increases in prices were widespread across products offered with the exception of cheddar cheese. Increases in prices were led by anhydrous milkfat (+17.2%), followed by skim milk powder (+7.0%), lactose (+6.6%), butter (+4.6%) and whole milk powder (+2.2%). Cheddar cheese prices finished slightly lower (-0.3%). Butter milk powder and sweet whey powder were not sold at the Jan 19th 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 Jan 15th 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 Jan 19th event declined 2.3% from the previous event while remaining 10.7% lower on a YOY basis. The YOY decline in total quantities sold was the 13th 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 and January.
Volumes sold for all products within the January auctions declined 6.0% from average December volumes sold while finishing 9.5% below last year’s average volumes sold for the month of January. Jan ’21 volumes sold for all products remained 4.8% above three year average seasonal figures, however.
U.S. butter prices remained at a discount to GDT winning prices at the Jan 19th event when accounting for differences in butterfat levels as GDT butter prices reached a 19 month high level. U.S. spot butter prices are currently trading at a 38.4% discount to GDT prices while CME futures prices traded at a 21.4% discount to GDT prices from Feb ’21 – Jun ’21. Butter was not sold at the GDT auction for Contract 6 (Jul ’21).
U.S. cheddar cheese prices finished at a slight premium to GDT winning prices at the Jan 19th event as GDT cheddar cheese prices declined slightly from recent eight month high levels. U.S. spot cheddar cheese prices are currently trading at an 8.1% discount to GDT prices however CME futures prices traded at a 0.5% premium to GDT prices from Feb ’21 – Jun ’21. Cheddar cheese was not sold at the GDT auction for Contract 6 (Jul ’21).
U.S. nonfat dry milk futures prices remained at a discount to GDT skim milk powder winning prices at the Jan 19th event when accounting for differences in protein values as GDT skim milk powder prices reached a six year high level. U.S. spot nonfat dry milk prices are currently trading at a 20.8% discount to GDT skim milk powder prices while CME futures prices traded at a 19.8% discount to GDT skim milk powder prices from Feb ’21 – Jun ’21. Skim milk powder was not sold at the GDT auction for Contract 6 (Jul ’21).