Global Dairy Trade Results Update – 11/3/20
Executive Summary
Dairy product prices declined during the GDT event held Nov 3rd. Highlights from the most recent auction include:
The GDT Price Index finished 9.6% below previous year price levels at the Nov 3rd auction, declining on a YOY basis for the 17th time in the past 18 events. The YOY decline in the GDT Price Index was the largest experienced throughout the past ten auctions. The GDT Price Index finished 2.6% below the three year average price for the first auction of November, finishing below three year average figures for the 19th consecutive event.
Within the latest auction, declines in prices were led by skim milk powder (-4.4%), followed by anhydrous milkfat (-2.6%), whole milk powder (-2.0%) and cheddar cheese (-0.8%). The declines more than offset increases in butter milk powder (+1.2%) and butter (+3.9%) prices. Lactose and sweet whey powder were not sold at the Nov 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 Nov 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 Nov 3rd event rebounded 2.2% from the previous event but remained 8.4% lower on a YOY basis. The YOY decline in total quantities sold was the eighth experienced in a row. Total quantities sold typically reach seasonal high levels throughout the months of September, October and November.
Volumes sold for all products within the first auction of November increased 1.6% from average October volumes sold but remained 7.6% below last year’s average volumes sold for the month of November. Volumes sold for all products finished 8.5% 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 Nov 3rd event as GDT butter prices rebounded to a six month high level. U.S. spot butter prices are currently trading at a 16.6% discount to GDT prices while CME futures prices traded at a 5.5% discount to GDT prices from Dec ’20 – Apr ’21. Butter was not sold at the GDT auction for Contract 6 (May ’21).
U.S. cheddar cheese prices remained at a premium to GDT winning prices at the Nov 3rd event as GDT cheddar cheese prices declined from the three month high level experienced throughout the previous auction. U.S. spot cheddar cheese prices are currently trading at a 54.6% premium to GDT prices while CME futures prices traded at a 6.1% premium to GDT prices from Dec ’20 – May ’21.
U.S. nonfat dry milk (NFDM) futures prices remained at a discount to GDT SMP winning prices at the Nov 3rd event, despite GDT SMP prices declining for the third consecutive auction. U.S. spot NFDM prices are currently trading at a 13.8% discount to GDT SMP prices while CME futures prices traded at a 12.4% discount to GDT SMP prices from Dec ’20 – Apr ’21. SMP was not sold at the GDT auction for Contract 6 (May ’21).
- The GDT Price Index declined 2.0% at the Nov 3rd event, finishing lower for the first time in the past four auctions.
- Declines in prices within the Nov 3rd event were led by skim milk powder, followed by anhydrous milkfat, whole milk powder and cheddar cheese. Whole milk powder and skim milk powder prices each declined to two month low levels. Butter prices rebounded to a six month high level throughout the Nov 3rd event, however, while butter milk powder prices also increased throughout the most recent auction.
- Total quantities sold for all products at the Nov 3rd event remained lower on a YOY basis for the eighth consecutive auction, finishing down 8.4%.
The GDT Price Index finished 9.6% below previous year price levels at the Nov 3rd auction, declining on a YOY basis for the 17th time in the past 18 events. The YOY decline in the GDT Price Index was the largest experienced throughout the past ten auctions. The GDT Price Index finished 2.6% below the three year average price for the first auction of November, finishing below three year average figures for the 19th consecutive event.
Within the latest auction, declines in prices were led by skim milk powder (-4.4%), followed by anhydrous milkfat (-2.6%), whole milk powder (-2.0%) and cheddar cheese (-0.8%). The declines more than offset increases in butter milk powder (+1.2%) and butter (+3.9%) prices. Lactose and sweet whey powder were not sold at the Nov 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 Nov 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 Nov 3rd event rebounded 2.2% from the previous event but remained 8.4% lower on a YOY basis. The YOY decline in total quantities sold was the eighth experienced in a row. Total quantities sold typically reach seasonal high levels throughout the months of September, October and November.
Volumes sold for all products within the first auction of November increased 1.6% from average October volumes sold but remained 7.6% below last year’s average volumes sold for the month of November. Volumes sold for all products finished 8.5% 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 Nov 3rd event as GDT butter prices rebounded to a six month high level. U.S. spot butter prices are currently trading at a 16.6% discount to GDT prices while CME futures prices traded at a 5.5% discount to GDT prices from Dec ’20 – Apr ’21. Butter was not sold at the GDT auction for Contract 6 (May ’21).
U.S. cheddar cheese prices remained at a premium to GDT winning prices at the Nov 3rd event as GDT cheddar cheese prices declined from the three month high level experienced throughout the previous auction. U.S. spot cheddar cheese prices are currently trading at a 54.6% premium to GDT prices while CME futures prices traded at a 6.1% premium to GDT prices from Dec ’20 – May ’21.
U.S. nonfat dry milk (NFDM) futures prices remained at a discount to GDT SMP winning prices at the Nov 3rd event, despite GDT SMP prices declining for the third consecutive auction. U.S. spot NFDM prices are currently trading at a 13.8% discount to GDT SMP prices while CME futures prices traded at a 12.4% discount to GDT SMP prices from Dec ’20 – Apr ’21. SMP was not sold at the GDT auction for Contract 6 (May ’21).