Global Dairy Trade Results Update – 5/5/20
Executive Summary
Dairy product prices continued to decline during the GDT event held May 5th. Highlights from the most recent auction include:
The GDT Price Index finished 17.8% below previous year price levels at the May 5th auction, declining on a YOY basis for the sixth consecutive event. The GDT Price Index finished 15.9% below the three year average price for the first auction of May, finishing below three year average figures for the seventh consecutive event.
Within the latest auction, declines in prices were led by butter milk powder (-10.3%), followed by cheddar cheese (-6.8%), butter (-5.8%), rennet casein (-5.1%) and anhydrous milkfat (-2.4%). The declines more than offset increases in skim milk powder (+0.1%), whole milk powder (+0.1%) and lactose (+7.9%) prices. Butter milk powder was not sold at the May 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 May 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 May 5th event declined 20.2% from the previous event but remained 6.9% higher on a YOY basis. The YOY increase in total quantities sold was the ninth experienced in a row however total quantities sold reached an 11 month low level, overall. Total quantities sold typically decline to seasonal low levels throughout the months of April and May.
Volumes sold for all products within the first auction of May declined 19.6% from average April volumes sold but finished 6.5% above last year’s average volumes sold for the month of May. May ’20 volumes sold for all products finished 12.2% below three year average seasonal figures, however.
U.S. butter prices remained at a significant discount to GDT winning prices at the May 5th event, despite GDT butter prices declining to a 17 month low level. U.S. spot butter prices are currently trading at a 30.2% discount to GDT prices while CME futures prices traded at a 16.6% discount to GDT prices from Jul ’20 – Nov ’20. Butter was not sold at the GDT auction for Contract 1 (Jun ’20).
U.S. cheddar cheese prices also remained at a discount to GDT winning prices at the May 5th event, despite GDT cheddar cheese prices declining to a three month low level. U.S. spot cheddar cheese prices are currently trading at a 34.6% discount to GDT prices while CME futures prices traded at a 15.5% discount to GDT prices from Jun ’20 – Oct ’20. Cheddar cheese was not sold at the GDT auction for Contract 3 (Aug ’20) and Contract 6 (Nov ’20).
U.S. nonfat dry milk (NFDM) futures prices also remained at a discount to GDT SMP winning prices at the May 5th event, despite GDT SMP prices remaining near recently experienced ten month low levels. U.S. spot NFDM prices are currently trading at a 27.3% discount to GDT SMP prices while CME futures prices traded at a 17.9% discount to GDT SMP prices from Jun ’20 – Oct ’20. SMP was not sold at the GDT auction for Contract 6 (Nov ’20).
- The GDT Price Index declined 0.8% at the May 5th event, reaching a 16 month low level. The decline experienced within the GDT Price Index was the sixth experienced throughout the past seven auctions.
- Declines in prices within the May 5th event were led by butter milk powder, followed by cheddar cheese, butter, rennet casein and anhydrous milkfat. Cheddar cheese and butter prices declined to three and 17 month low levels, respectively, throughout the May 5th event while anhydrous milkfat prices declined to a three and a half year low level. Whole milk powder and skim milk powder prices each increased slightly throughout the May 5th event.
- Total quantities sold for all products at the May 5th event declined seasonally to an 11 month low level but remained higher on a YOY basis for the ninth consecutive event, finishing up 6.9%.
The GDT Price Index finished 17.8% below previous year price levels at the May 5th auction, declining on a YOY basis for the sixth consecutive event. The GDT Price Index finished 15.9% below the three year average price for the first auction of May, finishing below three year average figures for the seventh consecutive event.
Within the latest auction, declines in prices were led by butter milk powder (-10.3%), followed by cheddar cheese (-6.8%), butter (-5.8%), rennet casein (-5.1%) and anhydrous milkfat (-2.4%). The declines more than offset increases in skim milk powder (+0.1%), whole milk powder (+0.1%) and lactose (+7.9%) prices. Butter milk powder was not sold at the May 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 May 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 May 5th event declined 20.2% from the previous event but remained 6.9% higher on a YOY basis. The YOY increase in total quantities sold was the ninth experienced in a row however total quantities sold reached an 11 month low level, overall. Total quantities sold typically decline to seasonal low levels throughout the months of April and May.
Volumes sold for all products within the first auction of May declined 19.6% from average April volumes sold but finished 6.5% above last year’s average volumes sold for the month of May. May ’20 volumes sold for all products finished 12.2% below three year average seasonal figures, however.
U.S. butter prices remained at a significant discount to GDT winning prices at the May 5th event, despite GDT butter prices declining to a 17 month low level. U.S. spot butter prices are currently trading at a 30.2% discount to GDT prices while CME futures prices traded at a 16.6% discount to GDT prices from Jul ’20 – Nov ’20. Butter was not sold at the GDT auction for Contract 1 (Jun ’20).
U.S. cheddar cheese prices also remained at a discount to GDT winning prices at the May 5th event, despite GDT cheddar cheese prices declining to a three month low level. U.S. spot cheddar cheese prices are currently trading at a 34.6% discount to GDT prices while CME futures prices traded at a 15.5% discount to GDT prices from Jun ’20 – Oct ’20. Cheddar cheese was not sold at the GDT auction for Contract 3 (Aug ’20) and Contract 6 (Nov ’20).
U.S. nonfat dry milk (NFDM) futures prices also remained at a discount to GDT SMP winning prices at the May 5th event, despite GDT SMP prices remaining near recently experienced ten month low levels. U.S. spot NFDM prices are currently trading at a 27.3% discount to GDT SMP prices while CME futures prices traded at a 17.9% discount to GDT SMP prices from Jun ’20 – Oct ’20. SMP was not sold at the GDT auction for Contract 6 (Nov ’20).