Global Dairy Trade Results Update – 12/1/20
Executive Summary
Dairy product prices continued to increase during the GDT event held Dec 1st. Highlights from the most recent auction include:
The GDT Price Index remained 5.1% below previous year price levels at the Dec 1st auction, declining on a YOY basis for the 19th time in the past 20 events. The GDT Price Index finished 4.5% above the three year average price for the first auction of December, however, finishing above three year average figures for the second consecutive event.
Within the latest auction, increases in prices were widespread and led by lactose (+13.5%), followed by whole milk powder (+5.0%), butter (+3.8%), skim milk powder (+3.6%), anhydrous milkfat (+2.6%), cheddar cheese (+2.4%) and butter milk powder (+1.3%). Sweet whey powder was not sold at the Dec 1st 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 Nov 30th 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 Dec 1st event declined 9.2% from the previous event while remaining 11.6% lower on a YOY basis. The YOY decline in total quantities sold was the tenth 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.
Volumes sold for all products within the first auction of December declined 9.3% from average November volumes sold while finishing 10.9% below last year’s average volumes sold for the month of December. Dec ’20 volumes sold for all products finished 5.6% below three year average seasonal figures, declining to a three year low seasonal level, overall.
U.S. butter prices finished at a discount to GDT winning prices at the Dec 1st event when accounting for differences in butterfat levels as GDT butter prices reached a seven month high level. U.S. spot butter prices are currently trading at a 22.8% discount to GDT prices while CME futures prices traded at a 9.6% discount to GDT prices from Jan ’21 – May ’21. Butter was not sold at the GDT auction for Contract 6 (Jun ’21).
U.S. cheddar cheese prices remained at a slight premium to GDT winning prices at the Dec 1st event, despite GDT cheddar cheese prices rebounding from the previous auction. U.S. spot cheddar cheese prices are currently trading at a 9.2% discount to GDT prices however CME futures prices traded at a 1.0% premium to GDT prices from Jan ’21 – Jun ’21.
U.S. nonfat dry milk futures prices remained at a discount to GDT skim milk powder winning prices at the Dec 1st event when accounting for differences in protein values as GDT skim milk powder prices reached a ten month high level. U.S. spot nonfat dry milk prices are currently trading at a 17.7% discount to GDT skim milk powder prices while CME futures prices traded at a 14.9% discount to GDT skim milk powder prices from Jan ’21 – May ’21. Skim milk powder was not sold at the GDT auction for Contract 6 (Jun ’21).
- The GDT Price Index increased 4.3% at the Dec 1st event, finishing higher for the fifth time in the past six auctions and reaching a ten month high level.
- Increases in prices within the Dec 1st event were widespread across products offered. Whole milk powder rebounded to a four month high level throughout the Dec 1st event while skim milk powder prices reached a ten month high. Butter and anhydrous milkfat prices reached seven and eight month high levels, respectively, while cheddar cheese prices finished higher for the first time in the past three auctions.
- Total quantities sold for all products at the Dec 1st event remained lower on a YOY basis for the tenth consecutive auction, finishing down 11.6%.
The GDT Price Index remained 5.1% below previous year price levels at the Dec 1st auction, declining on a YOY basis for the 19th time in the past 20 events. The GDT Price Index finished 4.5% above the three year average price for the first auction of December, however, finishing above three year average figures for the second consecutive event.
Within the latest auction, increases in prices were widespread and led by lactose (+13.5%), followed by whole milk powder (+5.0%), butter (+3.8%), skim milk powder (+3.6%), anhydrous milkfat (+2.6%), cheddar cheese (+2.4%) and butter milk powder (+1.3%). Sweet whey powder was not sold at the Dec 1st 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 Nov 30th 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 Dec 1st event declined 9.2% from the previous event while remaining 11.6% lower on a YOY basis. The YOY decline in total quantities sold was the tenth 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.
Volumes sold for all products within the first auction of December declined 9.3% from average November volumes sold while finishing 10.9% below last year’s average volumes sold for the month of December. Dec ’20 volumes sold for all products finished 5.6% below three year average seasonal figures, declining to a three year low seasonal level, overall.
U.S. butter prices finished at a discount to GDT winning prices at the Dec 1st event when accounting for differences in butterfat levels as GDT butter prices reached a seven month high level. U.S. spot butter prices are currently trading at a 22.8% discount to GDT prices while CME futures prices traded at a 9.6% discount to GDT prices from Jan ’21 – May ’21. Butter was not sold at the GDT auction for Contract 6 (Jun ’21).
U.S. cheddar cheese prices remained at a slight premium to GDT winning prices at the Dec 1st event, despite GDT cheddar cheese prices rebounding from the previous auction. U.S. spot cheddar cheese prices are currently trading at a 9.2% discount to GDT prices however CME futures prices traded at a 1.0% premium to GDT prices from Jan ’21 – Jun ’21.
U.S. nonfat dry milk futures prices remained at a discount to GDT skim milk powder winning prices at the Dec 1st event when accounting for differences in protein values as GDT skim milk powder prices reached a ten month high level. U.S. spot nonfat dry milk prices are currently trading at a 17.7% discount to GDT skim milk powder prices while CME futures prices traded at a 14.9% discount to GDT skim milk powder prices from Jan ’21 – May ’21. Skim milk powder was not sold at the GDT auction for Contract 6 (Jun ’21).