Executive Summary

Dairy product prices increased slightly during the GDT event held Apr 6^th. Highlights from the most recent auction include:

• The GDT Price Index increased 0.3% at the Apr 6^th event, reaching the second highest level experienced throughout the past seven years. The increase in the GDT Price Index was the ninth experienced throughout the past ten auctions.
• Increases in prices within the Apr 6^th event were led by butter milk powder, followed by cheddar cheese, butter, anhydrous milkfat and skim milk powder. Skim milk powder prices reached a six and a half year high level throughout the Apr 6^th event while butter prices approached recent three year high levels and cheddar cheese reached an 11 month high. Whole milk powder prices finished unchanged from the previous event while lactose prices declined throughout the Apr 6^th event.
• Total quantities sold for all products at the Apr 6^th event declined seasonally to an eight month low level but finished 23.7% above previous year figures. The YOY increase in total quantities sold was the largest experienced throughout the past 11 months.

Additional Report Details

Dairy product prices increased 0.3% within the Global Dairy Trade (GDT) event held Apr 6^th, finishing higher for the ninth time in the past ten auctions and reaching the second highest level experienced throughout the past seven years. 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 finished 39.3% above previous year price levels at the Apr 6^th auction, reaching a seven year high seasonal level. The GDT Price Index finished 27.8% above the three year average price for the first auction of April, finishing above three year average figures for the tenth consecutive event.

Within the latest auction, increases in prices were led by butter milk powder (+17.6%), followed by cheddar cheese (+2.2%), butter (+2.0%), anhydrous milkfat (+0.8%) and skim milk powder (+0.6%). Whole milk powder prices were unchanged from the previous event while lactose (-6.5%) prices finished lower. Sweet whey powder was not sold at the Apr 6^th 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 Apr 5^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 6^th event declined 6.6% from the previous event, reaching an eight month low level. Total quantities sold for all products remained 23.7% above previous year figures, however, increasing on a YOY basis for the second consecutive auction. The YOY increase in total quantities sold was the largest experienced throughout the past 11 months. 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 two most recent auctions. Total quantities sold typically reach seasonal high levels throughout the months of October and November, prior to declining seasonally throughout the months of December – May.

Volumes sold for all products within the first auction of April declined 4.2% from average March volumes sold but remained 22.7% above last year’s average volumes sold for the month of April. Apr ’21 volumes sold for all products are on pace to reach a seven year high seasonal level.

U.S. butter prices remained at a discount to GDT winning prices at the Apr 6^th event when accounting for differences in butterfat levels as GDT butter prices rebounded to a level approaching recent three year highs. U.S. spot butter prices are currently trading at a 28.1% discount to GDT prices while CME futures prices traded at a 25.6% discount to GDT prices from May ’21 – Oct ’21.

U.S. cheddar cheese prices remained at a discount to GDT winning prices at the Apr 6^th event as GDT cheddar cheese prices reached an 11 month high level. U.S. spot cheddar cheese prices are currently trading at a 17.1% discount to GDT prices while CME futures prices traded at a 6.8% discount to GDT prices during Sep ’21 – Oct ’21. Cheddar cheese was only sold at the GDT auction for Contract 5 and Contract 6.

U.S. nonfat dry milk futures prices remained at a discount to GDT skim milk powder winning prices at the Apr 6^th event when accounting for differences in protein values as GDT skim milk powder prices reached a six and a half year high level. U.S. spot nonfat dry milk prices are currently trading at a 24.9% discount to GDT skim milk powder prices while CME futures prices traded at a 21.7% discount to GDT skim milk powder prices from May ’21 – Oct ’21.