Executive Summary

Dairy product prices declined during the GDT event held Mar 16^th. Highlights from the most recent auction include:

• The GDT Price Index declined 3.8% at the Mar 16^th event, finishing below the seven year high level experienced throughout the previous event. The decline in the GDT Price Index was the first experienced throughout the past nine auctions.
• Declines in prices within the Mar 16^th event were led by whole milk powder, followed by butter and cheddar cheese. Whole milk powder prices remained at the second highest level experienced throughout the past seven years while butter prices remained at the second highest level experienced throughout the past two and a half years. Skim milk powder prices reached a six and a half year high level throughout the Mar 16^th event.
• Total quantities sold for all products at the Mar 16^th event finished 10.0% above previous year figures, increasing on a YOY basis for the first time in the past 17 auctions.

Additional Report Details

Dairy product prices declined 3.8% within the Global Dairy Trade (GDT) event held Mar 16^th, finishing below the seven year high level experienced throughout the previous event. The decline in the GDT Price Index was the first experienced throughout the past nine auctions. The GDT Price Index represents a weighted-average of the percentage changes in prices between trading events for all products offered.

The GDT Price Index remained 39.3% above previous year price levels at the Mar 16^th auction, reaching a seven year high seasonal level. The GDT Price Index finished 28.0% above the three year average price for the second auction of March, finishing above three year average figures for the ninth consecutive event.

Within the latest auction, declines in prices were led by whole milk powder (-6.2%), followed by butter (-2.8%) and cheddar cheese (-0.7%). Increases in prices were led by lactose (+8.6%), followed by anhydrous milkfat (+3.7%) and skim milk powder (+0.7%). Butter milk powder and sweet whey powder were not sold at the Mar 16^th 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 Mar 15^th 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 Mar 16^th event rebounded 5.2% from the seven month low level experienced throughout the previous auction. Total quantities sold for all products finished 10.0% above previous year figures, increasing on a YOY basis for the first time in the past 17 auctions. Total quantities sold typically reach seasonal high levels throughout the months of October and November, prior to declining seasonally throughout the months of December – May.

Volumes sold for all products within the March auctions declined 5.7% from average February volumes sold but remained 5.3% above last year’s average volumes sold for the month of March. Mar ’21 volumes sold for all products reached a seven year high seasonal level.

U.S. butter prices remained at a discount to GDT winning prices at the Mar 16^th event when accounting for differences in butterfat levels, despite GDT butter prices declining from the three year high level experienced throughout the previous auction. U.S. spot butter prices are currently trading at a 31.5% discount to GDT prices while CME futures prices traded at a 28.0% discount to GDT prices from Apr ’21 – Sep ’21.

U.S. cheddar cheese prices remained at a discount to GDT winning prices at the Mar 16^th event, despite GDT cheddar cheese prices declining from the ten month high level experienced throughout the previous auction. U.S. spot cheddar cheese prices are currently trading at a 13.4% discount to GDT prices while CME futures prices traded at a 4.7% discount to GDT prices during Sep ’21. Cheddar cheese was only sold at the GDT auction for Contract 6.

U.S. nonfat dry milk futures prices remained at a discount to GDT skim milk powder winning prices at the Mar 16^th event when accounting for differences in protein values as GDT skim milk powder prices reached a six and a half year high level. U.S. spot nonfat dry milk prices are currently trading at a 25.0% discount to GDT skim milk powder prices while CME futures prices traded at a 21.8% discount to GDT skim milk powder prices from Apr ’21 – Sep ’21.