Global Dairy Trade Results Update – 12/17/19
Executive Summary
Dairy product prices declined during the GDT event held Dec 17th. Highlights from the most recent auction include:
Despite declining from the previous event, the GDT Price Index remained 14.8% above previous year price levels at the Dec 17th event, increasing on a YOY basis for the 12th consecutive event. The GDT Price Index also finished 5.1% above the three year average price for the second auction of December, finishing above three year average figures for the 24th consecutive event. The GDT Price Index remained at a three year high seasonal level, overall.
Within the latest auction, declines in prices were led by whole milk powder (-6.7%), followed by skim milk powder (-6.3%), butter (-2.4%) and anhydrous milkfat (-0.3%). The declines more than offset higher lactose (+0.6%), cheddar cheese (+1.7%) and rennet casein (+2.6%) prices. Butter milk powder and sweet whey powder were not sold at the Dec 17th 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 Dec 16th 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 17th event of 35,748 MT declined 1.4% from the previous event while finishing 1.2% lower on a YOY basis. The YOY decline in total quantities sold was the seventh experienced in a row.
Volumes sold for all products within the December auctions declined 6.1% from average November volumes sold while finishing 0.9% below last year’s average volumes sold for the month of December. Dec ’19 volumes sold for all products remained 22.4% above three year average seasonal figures, however.
U.S. butter prices remained at a significant premium to GDT winning prices at the Dec 17th event as GDT butter prices declined to a 12 month low level. U.S. spot butter prices are currently trading at a 15.1% premium to GDT prices while CME futures prices traded at a 20.9% premium to GDT prices from Jan ’20 – May ’20. Butter was not sold at the GDT auction for Contract 6 (Jun ’20).
U.S. cheddar cheese prices remained at a slight premium to GDT winning prices at the Dec 17th event, despite GDT cheddar cheese prices increasing to a five month high level. U.S. spot cheddar cheese prices are currently trading at a 3.7% discount to GDT prices however CME futures prices traded at a 1.3% premium to GDT prices from Jan ’20 – May ’20. Cheddar cheese was not sold at the GDT auction for Contract 6 (Jun ’20).
U.S. nonfat dry milk (NFDM) futures prices remained at a discount to GDT winning prices at the Dec 17th event, despite GDT SMP prices declining from the five year high levels experienced throughout the previous auction. U.S. spot NFDM prices are currently trading at a 5.5% discount to GDT prices while CME futures prices traded at a 7.7% discount to GDT prices from Jan ’20 – May ’20. SMP was not sold at the GDT auction for Contract 6 (Jun ’20).
- The GDT Price Index declined 5.1% at the Dec 17th event, finishing lower for the second consecutive auction. The decline was the largest experienced throughout the past 33 months on a percentage basis.
- Declines in prices within the Dec 17th event were led by whole milk powder, followed by skim milk powder, butter and anhydrous milkfat. Whole milk powder and skim milk powder prices declined from the three and five year high levels experienced throughout the previous auction, respectively, while butter prices declined to a 12 month low level. Cheddar cheese prices increased to a five month high level throughout the Dec 17th event, however, increasing for the third consecutive auction.
- Total quantities sold for all products at the Dec 17th event declined seasonally from the previous auction while remaining lower on a YOY basis for the seventh consecutive event. Volumes sold for all products within the December auctions finished 0.9% below last year’s average volumes sold for the month of December but remained 22.4% above three year average seasonal figures.
Despite declining from the previous event, the GDT Price Index remained 14.8% above previous year price levels at the Dec 17th event, increasing on a YOY basis for the 12th consecutive event. The GDT Price Index also finished 5.1% above the three year average price for the second auction of December, finishing above three year average figures for the 24th consecutive event. The GDT Price Index remained at a three year high seasonal level, overall.
Within the latest auction, declines in prices were led by whole milk powder (-6.7%), followed by skim milk powder (-6.3%), butter (-2.4%) and anhydrous milkfat (-0.3%). The declines more than offset higher lactose (+0.6%), cheddar cheese (+1.7%) and rennet casein (+2.6%) prices. Butter milk powder and sweet whey powder were not sold at the Dec 17th 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 Dec 16th 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 17th event of 35,748 MT declined 1.4% from the previous event while finishing 1.2% lower on a YOY basis. The YOY decline in total quantities sold was the seventh experienced in a row.
Volumes sold for all products within the December auctions declined 6.1% from average November volumes sold while finishing 0.9% below last year’s average volumes sold for the month of December. Dec ’19 volumes sold for all products remained 22.4% above three year average seasonal figures, however.
U.S. butter prices remained at a significant premium to GDT winning prices at the Dec 17th event as GDT butter prices declined to a 12 month low level. U.S. spot butter prices are currently trading at a 15.1% premium to GDT prices while CME futures prices traded at a 20.9% premium to GDT prices from Jan ’20 – May ’20. Butter was not sold at the GDT auction for Contract 6 (Jun ’20).
U.S. cheddar cheese prices remained at a slight premium to GDT winning prices at the Dec 17th event, despite GDT cheddar cheese prices increasing to a five month high level. U.S. spot cheddar cheese prices are currently trading at a 3.7% discount to GDT prices however CME futures prices traded at a 1.3% premium to GDT prices from Jan ’20 – May ’20. Cheddar cheese was not sold at the GDT auction for Contract 6 (Jun ’20).
U.S. nonfat dry milk (NFDM) futures prices remained at a discount to GDT winning prices at the Dec 17th event, despite GDT SMP prices declining from the five year high levels experienced throughout the previous auction. U.S. spot NFDM prices are currently trading at a 5.5% discount to GDT prices while CME futures prices traded at a 7.7% discount to GDT prices from Jan ’20 – May ’20. SMP was not sold at the GDT auction for Contract 6 (Jun ’20).