Global Dairy Trade Results Update – 3/3/20
Executive Summary
Dairy product prices continued to decline during the GDT event held Mar 3rd. Highlights from the most recent auction include:
The GDT Price Index finished 7.9% below previous year price levels at the Mar 3rd auction, declining on a YOY basis for the second consecutive event. The GDT Price Index finished 4.9% below the three year average price for the first auction of March, finishing below three year average figures for the third consecutive event.
Within the latest auction, declines in prices were led by butter milk powder (-4.8%), followed by cheddar cheese (-4.7%), skim milk powder (-3.2%), anhydrous milkfat (-1.7%) and whole milk powder (-0.5%). The declines more than offset increases in rennet casein (+0.5%), butter (+1.0%) and lactose (+5.7%) prices. Sweet whey powder was not sold at the Mar 3rd 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 2nd 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 3rd event declined 9.2% from the previous event but remained 6.9% higher on a YOY basis. The YOY increase in total quantities sold was the fifth experienced in a row.
Volumes sold for all products within the first auction of March declined 10.6% from average February volumes sold but finished 12.1% above last year’s average volumes sold for the month of March. Mar ’20 volumes sold for all products are on pace to finish 19.5% above three year average seasonal figures, reaching a six year seasonal high level.
U.S. butter prices remained at a premium to GDT winning prices at the Mar 3rd event, despite GDT butter prices increasing from the previous auction. U.S. spot butter prices are currently trading at a 0.1% premium to GDT prices while CME futures prices traded at a 5.8% premium to GDT prices from Apr ’20 – Aug ’20. Butter was not sold at the GDT auction for Contract 6 (Sep ’20).
U.S. cheddar cheese prices remained at a discount to GDT winning prices at the Mar 3rd event, despite GDT cheddar cheese prices declining from the nine month high level experienced throughout the previous auction. U.S. spot cheddar cheese prices are currently trading at a 13.8% discount to GDT prices while CME futures prices traded at a 10.7% discount to GDT prices from Apr ’20 – Jul ’20. Cheddar cheese was not sold at the GDT auction for Contract 5 (Aug ’20) and Contract 6 (Sep ’20).
U.S. nonfat dry milk (NFDM) futures prices remained at a discount to GDT SMP winning prices at the Mar 3rd event, despite GDT SMP prices declining to a four month low level. U.S. spot NFDM prices are currently trading at a 13.5% discount to GDT SMP prices while CME futures prices also traded at an 11.6% discount to GDT SMP prices from Apr ’20 – Aug ’20. SMP was not sold at the GDT auction for Contract 6 (Sep ’20).
- The GDT Price Index declined 1.2% at the Mar 3rd event, finishing at a 13 month low level. The GDT Price Index finished lower on a YOY basis for the second consecutive event, finishing down 7.9%.
- Declines in prices within the Mar 3rd event were led by butter milk powder, followed by cheddar cheese, skim milk powder, anhydrous milkfat and whole milk powder. Skim milk powder and whole milk powder prices declined to four and 13 month low levels, respectively, throughout the Mar 3rd event. Cheddar cheese prices declined from the nine month high level experienced throughout the previous auction however butter prices rebounded slightly from the previous event.
- Total quantities sold for all products at the Mar 3rd event declined seasonally from the previous event but remained higher on a YOY basis for the fifth consecutive event. Volumes sold for all products within the first auction of March finished 12.1% above last year’s average volumes sold for the month of March and 19.5% above three year average seasonal figures, reaching a six year high seasonal level, overall.
The GDT Price Index finished 7.9% below previous year price levels at the Mar 3rd auction, declining on a YOY basis for the second consecutive event. The GDT Price Index finished 4.9% below the three year average price for the first auction of March, finishing below three year average figures for the third consecutive event.
Within the latest auction, declines in prices were led by butter milk powder (-4.8%), followed by cheddar cheese (-4.7%), skim milk powder (-3.2%), anhydrous milkfat (-1.7%) and whole milk powder (-0.5%). The declines more than offset increases in rennet casein (+0.5%), butter (+1.0%) and lactose (+5.7%) prices. Sweet whey powder was not sold at the Mar 3rd 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 2nd 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 3rd event declined 9.2% from the previous event but remained 6.9% higher on a YOY basis. The YOY increase in total quantities sold was the fifth experienced in a row.
Volumes sold for all products within the first auction of March declined 10.6% from average February volumes sold but finished 12.1% above last year’s average volumes sold for the month of March. Mar ’20 volumes sold for all products are on pace to finish 19.5% above three year average seasonal figures, reaching a six year seasonal high level.
U.S. butter prices remained at a premium to GDT winning prices at the Mar 3rd event, despite GDT butter prices increasing from the previous auction. U.S. spot butter prices are currently trading at a 0.1% premium to GDT prices while CME futures prices traded at a 5.8% premium to GDT prices from Apr ’20 – Aug ’20. Butter was not sold at the GDT auction for Contract 6 (Sep ’20).
U.S. cheddar cheese prices remained at a discount to GDT winning prices at the Mar 3rd event, despite GDT cheddar cheese prices declining from the nine month high level experienced throughout the previous auction. U.S. spot cheddar cheese prices are currently trading at a 13.8% discount to GDT prices while CME futures prices traded at a 10.7% discount to GDT prices from Apr ’20 – Jul ’20. Cheddar cheese was not sold at the GDT auction for Contract 5 (Aug ’20) and Contract 6 (Sep ’20).
U.S. nonfat dry milk (NFDM) futures prices remained at a discount to GDT SMP winning prices at the Mar 3rd event, despite GDT SMP prices declining to a four month low level. U.S. spot NFDM prices are currently trading at a 13.5% discount to GDT SMP prices while CME futures prices also traded at an 11.6% discount to GDT SMP prices from Apr ’20 – Aug ’20. SMP was not sold at the GDT auction for Contract 6 (Sep ’20).