Executive Summary

Dairy product prices continued to decline during the GDT auction held Apr 19^th. Highlights from the most recent auction include:

• The GDT Price Index declined 3.6% at the Apr 19^th event, finishing lower for the third consecutive auction and returning to a two month low level. The decline in the GDT Price Index was the largest experienced throughout the past nine months. The GDT Price Index remained at a nine year high seasonal level, however.
• Declines in prices within the Apr 19^th event were widespread across products offered and led by whole milk powder. Whole milk powder prices declined to a three month low level while butter, anhydrous milkfat, cheddar cheese and skim milk powder prices all declined to two month low levels.
• Total quantities sold for all products at the Apr 19^th event rebounded from the ten month low level experienced throughout the previous auction but remained 11.4% below previous year levels. Total quantities sold have finished below previous year levels over four consecutive auctions.

Additional Report Details

Dairy product prices declined 3.6% within the Global Dairy Trade (GDT) event held Apr 19^th, finishing lower for the third consecutive auction and returning to a two month low level. The decline in the GDT Price Index was the largest experienced throughout the past nine months. The GDT Price Index had increased over 13 of 14 auctions through the first auction of March, prior to declining slightly over the three most recent events. 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 16.1% above previous year price levels at the Apr 19^th auction, reaching a nine year high seasonal level. The GDT Price Index finished 37.7% above the three year average price for the second auction of April, remaining above three year average figures for the 35^th consecutive event.

Within the latest auction, declines in prices were widespread across products offered and led by whole milk powder (-4.4%), followed by skim milk powder (-4.2%), cheddar cheese (-3.9%), butter (-3.7%), lactose (-2.4%) and anhydrous milkfat (-1.3%). Butter milk powder and sweet whey powder were not sold at the Apr 19^th event. Whole milk powder and skim milk powder combined to account for 79% of all products traded within GDT events throughout the 2021 calendar year.

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 Apr 18^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 Apr 19^th event rebounded 3.1% from the ten month low level experienced throughout the previous auction but remained 11.4% below previous year figures. Total quantities sold have finished below previous year levels over four consecutive auctions. Total quantities sold typically reach seasonal high levels throughout the month of November, prior to declining throughout the next several months.

Volumes sold for all products within the April auctions declined 10.0% from average March volumes while finishing 12.9% below last year’s average volumes sold for the month of April. Volumes sold for all products within the April auctions remained at the second highest seasonal level experienced throughout the past five years, however.

U.S. butter prices remained at a discount to GDT winning prices at the Apr 19^th event when accounting for differences in butterfat levels, despite GDT butter prices declining to a two month low level. U.S. spot butter prices are currently trading at a 6.8% discount to GDT prices while CME futures prices traded at a 7.6% discount to GDT prices from May ’22 – Sep ’22. Butter was not sold for Contract Period 6 (Oct ’22).

U.S. cheddar cheese prices remained at a discount to GDT winning prices at the Apr 19^th event, despite GDT cheddar cheese prices declining to a two month low level. U.S. spot cheddar cheese prices are currently trading at a 14.2% discount to GDT prices while CME futures prices traded at a 15.5% discount to GDT prices from May ’22 – Oct ’22. Cheddar cheese was not sold for Contract Period 4 (Aug ’22).

U.S. nonfat dry milk futures prices remained at a discount to GDT skim milk powder winning prices at the Apr 19^th event when accounting for differences in protein values, despite GDT skim milk powder prices declining to a two month low level. U.S. spot nonfat dry milk prices are currently trading at an 11.5% discount to GDT skim milk powder prices while CME futures prices traded at an 11.0% discount to GDT skim milk powder prices from May ’22 – Sep ’22. Skim milk powder was not sold for Contract Period 6 (Oct ’22).

GDT equivalent Class III and Class IV milk prices reached values of $30.84/cwt and $28.60/cwt, respectively, throughout the April auctions based on GDT butter, cheddar cheese and skim milk powder prices. The GDT equivalent Class III and Class IV prices each remained near record high levels experienced throughout the previous month.

GDT equivalent Class III and Class IV milk prices are currently trading at premiums of $7.29/cwt and $3.50/cwt, respectively, vs. U.S. price levels.