Global Dairy Trade Results Update – 1/5/21
Executive Summary
Dairy product prices continued to increase during the GDT event held Jan 5th. Highlights from the most recent auction include:
The GDT Price Index finished 2.4% above previous year price levels at the Jan 5th auction, reaching a seven year high seasonal level. The GDT Price Index finished 10.2% above the three year average price for the first auction of January, finishing above three year average figures for the fourth consecutive event.
Within the latest auction, increases in prices were widespread and led by lactose (+7.4%), followed by butter (+7.2%), butter milk powder (+6.9%), anhydrous milkfat (+5.5%), cheddar cheese (+5.0%), skim milk powder (+4.1%) and whole milk powder (+3.1%). Sweet whey powder was not sold at the Jan 5th 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 Jan 4th 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 Jan 5th event declined 4.4% from the previous event while remaining 8.3% lower on a YOY basis. The YOY decline in total quantities sold was the 12th 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 and January.
Volumes sold for all products within the first auction of January declined 4.9% from average December volumes sold while finishing 8.4% below last year’s average volumes sold for the month of January. Jan ’21 volumes sold for all products remained 6.1% above three year average seasonal figures, however.
U.S. butter prices remained at a discount to GDT winning prices at the Jan 5th event when accounting for differences in butterfat levels as GDT butter prices reached an 18 month high level. U.S. spot butter prices are currently trading at a 30.4% discount to GDT prices while CME futures prices traded at an 18.0% discount to GDT prices from Feb ’21 – Jun ’21. Butter was not sold at the GDT auction for Contract 6 (Jul ’21).
U.S. cheddar cheese prices finished at a slight discount to GDT winning prices at the Jan 5th event as GDT cheddar cheese prices reached an eight month high level. U.S. spot cheddar cheese prices are currently trading at a 16.2% discount to GDT prices while CME futures prices traded at a 4.3% discount to GDT prices from Feb ’21 – Jun ’21. Cheddar cheese was not sold at the GDT auction for Contract 6 (Jul ’21).
U.S. nonfat dry milk futures prices remained at a discount to GDT skim milk powder winning prices at the Jan 5th event when accounting for differences in protein values as GDT skim milk powder prices reached a 13 month high level. U.S. spot nonfat dry milk prices are currently trading at a 19.3% discount to GDT skim milk powder prices while CME futures prices traded at an 18.9% discount to GDT skim milk powder prices from Feb ’21 – Jun ’21. Skim milk powder was not sold at the GDT auction for Contract 6 (Jul ’21).
- The GDT Price Index increased 3.9% at the Jan 5th event, finishing higher for the seventh time in the past eight auctions and reaching a 13 month high level.
- Increases in prices within the Jan 5th event were widespread across products offered. Whole milk powder and skim milk powder prices each reached 13 month high levels throughout the Jan 5th event while cheddar cheese prices reached an eight month high. Anhydrous milkfat and butter prices reached 11 and 18 month high levels, respectively.
- Total quantities sold for all products at the Jan 5th event remained lower on a YOY basis for the 12th consecutive auction, finishing down 8.3%.
The GDT Price Index finished 2.4% above previous year price levels at the Jan 5th auction, reaching a seven year high seasonal level. The GDT Price Index finished 10.2% above the three year average price for the first auction of January, finishing above three year average figures for the fourth consecutive event.
Within the latest auction, increases in prices were widespread and led by lactose (+7.4%), followed by butter (+7.2%), butter milk powder (+6.9%), anhydrous milkfat (+5.5%), cheddar cheese (+5.0%), skim milk powder (+4.1%) and whole milk powder (+3.1%). Sweet whey powder was not sold at the Jan 5th 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 Jan 4th 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 Jan 5th event declined 4.4% from the previous event while remaining 8.3% lower on a YOY basis. The YOY decline in total quantities sold was the 12th 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 and January.
Volumes sold for all products within the first auction of January declined 4.9% from average December volumes sold while finishing 8.4% below last year’s average volumes sold for the month of January. Jan ’21 volumes sold for all products remained 6.1% above three year average seasonal figures, however.
U.S. butter prices remained at a discount to GDT winning prices at the Jan 5th event when accounting for differences in butterfat levels as GDT butter prices reached an 18 month high level. U.S. spot butter prices are currently trading at a 30.4% discount to GDT prices while CME futures prices traded at an 18.0% discount to GDT prices from Feb ’21 – Jun ’21. Butter was not sold at the GDT auction for Contract 6 (Jul ’21).
U.S. cheddar cheese prices finished at a slight discount to GDT winning prices at the Jan 5th event as GDT cheddar cheese prices reached an eight month high level. U.S. spot cheddar cheese prices are currently trading at a 16.2% discount to GDT prices while CME futures prices traded at a 4.3% discount to GDT prices from Feb ’21 – Jun ’21. Cheddar cheese was not sold at the GDT auction for Contract 6 (Jul ’21).
U.S. nonfat dry milk futures prices remained at a discount to GDT skim milk powder winning prices at the Jan 5th event when accounting for differences in protein values as GDT skim milk powder prices reached a 13 month high level. U.S. spot nonfat dry milk prices are currently trading at a 19.3% discount to GDT skim milk powder prices while CME futures prices traded at an 18.9% discount to GDT skim milk powder prices from Feb ’21 – Jun ’21. Skim milk powder was not sold at the GDT auction for Contract 6 (Jul ’21).