Executive Summary

Dairy product prices continued to decline slightly during the GDT event held Jun 15^th. Highlights from the most recent auction include:

• The GDT Price Index declined 1.3% at the Jun 15^th event, finishing lower for the sixth time in the past seven auctions but remaining at an eight year high seasonal level.
• Declines in prices within the Jun 15^th event were led by whole milk powder, followed by butter and skim milk powder. Whole milk powder prices declined to a four month low level while skim milk powder and butter prices declined to three and five month lows, respectively. Cheddar cheese prices rebounded to a two month high level throughout the Jun 15^th event while lactose and anhydrous milkfat prices also finished higher.
• Total quantities sold for all products at the Jun 15^th event remained above previous year levels for the seventh consecutive event. Jun ’21 volumes sold for all products reached a five year high seasonal level.

Additional Report Details

Dairy product prices declined 1.3% within the Global Dairy Trade (GDT) event held Jun 15^th, finishing lower for the sixth time in the past seven auctions and reaching a four month low level. The GDT Price Index remained just 6.6% below the seven year high level experienced throughout the first auction of Mar ’21, however. 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 36.5% above previous year price levels at the Jun 15^th auction, reaching an eight year high seasonal level. The GDT Price Index finished 27.5% above the three year average price for the second auction of June, finishing above three year average figures for the 15^th consecutive event.

Within the latest auction, declines in prices were led by whole milk powder (-1.8%), followed by butter (-1.7%) and skim milk powder (-1.7%). Anhydrous milkfat (+0.6%), lactose (+0.4%) and cheddar cheese (+0.2%) prices finished higher throughout the Jun 15^th event while butter milk powder and sweet whey powder were not sold.

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 Jun 14^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 Jun 15^th event declined 5.7% from the previous event but remained 0.5% above previous year figures. The weekly YOY increase in total quantities sold for all products was the seventh experienced in a row. Total quantities sold had finished lower on a YOY basis over 16 consecutive events through the first auction of March, prior to increasing on a YOY basis throughout the seven most recent auctions. Total quantities sold typically reach seasonal low levels throughout the month of May, prior to increasing seasonally throughout the next several months.

Volumes sold for all products within the June auctions increased 2.8% from average May volumes sold while finishing 2.2% above last year’s average volumes sold for the month of June. Jun ’21 volumes sold for all products reached a five year high seasonal level.

U.S. butter prices remained at a discount to GDT winning prices at the Jun 15^th event when accounting for differences in butterfat levels, despite GDT butter prices declining to a five month low level. U.S. spot butter prices are currently trading at a 10.7% discount to GDT prices while CME futures prices traded at a 7.8% discount to GDT prices from Jul ’21 – Dec ’21.

U.S. cheddar cheese prices remained at a discount to GDT winning prices at the Jun 15^th event as GDT cheddar cheese prices rebounded to a two month high level. U.S. spot cheddar cheese prices are currently trading at a 19.3% discount to GDT prices while CME futures prices traded at a 5.4% discount to GDT prices during Sep ’21 – Dec ’21. Cheddar cheese was not sold for Contract Periods 1 and 2.

U.S. nonfat dry milk futures prices remained at a discount to GDT skim milk powder winning prices at the Jun 15^th event when accounting for differences in protein values, despite GDT skim milk powder prices declining to a three month low level. U.S. spot nonfat dry milk prices are currently trading at a 16.6% discount to GDT skim milk powder prices while CME futures prices traded at a 14.5% discount to GDT skim milk powder prices from Jul ’21 – Dec ’21.