Executive Summary

Dairy product prices declined slightly during the GDT auction held Apr 5^th. Highlights from the most recent auction include:

• The GDT Price Index declined 1.0% at the Apr 5^th event, finishing lower for the second consecutive auction but remaining near recently experienced 14 year high levels. The GDT Price Index remained at a record high seasonal level for the first auction of April.
• Declines in prices within the Apr 5^th event were led by anhydrous milkfat, followed by whole milk powder, butter and lactose. Whole milk powder and butter prices have both declined over the two most recent auctions but remain elevated, overall. Skim milk powder prices increased to an eight year high level throughout the Apr 5^th event while cheddar cheese prices reached a record high level.
• Total quantities sold for all products at the Apr 5^th event declined seasonally to a ten month low level while finishing 14.3% below previous year levels. Total quantities sold have finished below previous year levels over three consecutive auctions.

Additional Report Details

Dairy product prices declined 1.0% within the Global Dairy Trade (GDT) event held Apr 5^th, finishing lower for the second consecutive auction but remaining near recently experienced 14 year high levels. The GDT Price Index had increased over 13 of 14 auctions through the first auction of March, prior to declining slightly over the two most recent events. 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 20.4% above previous year price levels at the Apr 5^th auction, remaining at a record high seasonal level. The GDT Price Index finished 41.3% above the three year average price for the first auction of April, remaining above three year average figures for the 34^th consecutive event.

Within the latest auction, declines in prices were led by anhydrous milkfat (-2.5%), followed by whole milk powder (-1.5%), butter (-0.6%) and lactose (-0.6%). The declines more than offset increases in butter milk powder (+6.3%), cheddar cheese (+2.7%) and skim milk powder (+1.0%) prices. Sweet whey powder was not sold at the Apr 5^th event. Whole milk powder and skim milk powder combined to account for 79% of all products traded within GDT events throughout the 2021 calendar year.

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 4^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 5^th event declined seasonally to a ten month low level, finishing 7.9% below the previous event and 14.3% below previous year figures. Total quantities sold have finished below previous year levels over three consecutive auctions. Total quantities sold typically reach seasonal high levels throughout the month of November, prior to declining throughout the next several months.

Volumes sold for all products within the first auction of April declined 11.4% from average March volumes while finishing 14.2% below last year’s average volumes sold for the month of April.

U.S. butter prices remained at a discount to GDT winning prices at the Apr 5^th event when accounting for differences in butterfat levels, despite GDT butter prices declining over the past two auctions. U.S. spot butter prices are currently trading at a 10.8% discount to GDT prices while CME futures prices traded at a 12.1% discount to GDT prices from May ’22 – Sep ’22. Butter was not sold for Contract Period 6 (Oct ’22).

U.S. cheddar cheese prices remained at a discount to GDT winning prices at the Apr 5^th event as GDT cheddar cheese prices continued to reach new record high levels. U.S. spot cheddar cheese prices are currently trading at a 22.8% discount to GDT prices while CME futures prices traded at a 21.2% discount to GDT prices from May ’22 – Sep ’22. Cheddar cheese was not sold for Contract Period 4 (Aug ’22) and Contract Period 6 (Oct ’22).

U.S. nonfat dry milk futures prices remained at a discount to GDT skim milk powder winning prices at the Apr 5^th event when accounting for differences in protein values as GDT skim milk powder prices reached an eight year high level. U.S. spot nonfat dry milk prices are currently trading at a 13.9% discount to GDT skim milk powder prices while CME futures prices traded at a 13.8% discount to GDT skim milk powder prices from May ’22 – Sep ’22. Skim milk powder was not sold for Contract Period 6 (Oct ’22).

GDT equivalent Class III and Class IV milk prices reached values of $31.62/cwt and $29.22/cwt, respectively, throughout the first auction of April based on GDT butter, cheddar cheese and skim milk powder prices. The GDT equivalent Class III and Class IV prices each reached record high levels.

GDT equivalent Class III and Class IV milk prices are currently trading at premiums of $8.07/cwt and $4.12/cwt, respectively, vs. U.S. price levels.