Global Dairy Trade Results Update – 11/17/20
Executive Summary
Dairy product prices increased during the GDT event held Nov 17th. Highlights from the most recent auction include:
The GDT Price Index remained 9.5% below previous year price levels at the Nov 17th auction, declining on a YOY basis for the 18th time in the past 19 events. The GDT Price Index finished 0.8% above the three year average price for the second auction of November, however, finishing above three year average figures for the first time in the past 20 auctions.
Within the latest auction, increases in prices were led by anhydrous milkfat (+4.1%), followed by skim milk powder (+2.5%), whole milk powder (+1.8%) and butter (+0.4%). The increases more than offset declines in cheddar cheese (-3.5%) and lactose (-18.8%) prices. Butter milk powder and sweet whey powder were not sold at the Nov 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 Nov 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 Nov 17th event declined 0.3% from the previous event while remaining 7.0% lower on a YOY basis. The YOY decline in total quantities sold was the ninth 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 November auctions increased 1.4% from average October volumes sold but remained 7.7% below last year’s average volumes sold for the month of November. Nov ’20 volumes sold for all products finished 8.6% 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 17th event when accounting for differences in butterfat levels as GDT butter prices rebounded to a six month high level. U.S. spot butter prices are currently trading at an 18.7% discount to GDT prices while CME futures prices traded at a 7.0% 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 17th event as GDT cheddar cheese prices declined for the second consecutive auction. U.S. spot cheddar cheese prices are currently trading at a 0.4% premium to GDT prices while CME futures prices traded at a 4.9% premium to GDT prices from Dec ’20 – May ’21.
U.S. nonfat dry milk futures prices remained at a discount to GDT skim milk powder winning prices at the Nov 17th event when accounting for differences in protein values as GDT skim milk powder prices rebounded from the previous event. U.S. spot nonfat dry milk prices are currently trading at a 17.2% discount to GDT skim milk powder prices while CME futures prices traded at a 15.6% discount to GDT skim milk powder prices from Dec ’20 – Apr ’21. Skim milk powder was not sold at the GDT auction for Contract 6 (May ’21).
- The GDT Price Index increased 1.8% at the Nov 17th event, finishing higher for the fourth time in the past five auctions.
- Increases in prices within the Nov 17th event were led by anhydrous milkfat, followed by skim milk powder, whole milk powder and butter. Whole milk powder and skim milk powder prices each rebounded from two month low levels experienced throughout the previous auction while butter prices rebounded to a six month high level. Cheddar cheese prices declined for the second consecutive auction throughout the Nov 17th event.
- Total quantities sold for all products at the Nov 17th event remained lower on a YOY basis for the ninth consecutive auction, finishing down 7.0%.
The GDT Price Index remained 9.5% below previous year price levels at the Nov 17th auction, declining on a YOY basis for the 18th time in the past 19 events. The GDT Price Index finished 0.8% above the three year average price for the second auction of November, however, finishing above three year average figures for the first time in the past 20 auctions.
Within the latest auction, increases in prices were led by anhydrous milkfat (+4.1%), followed by skim milk powder (+2.5%), whole milk powder (+1.8%) and butter (+0.4%). The increases more than offset declines in cheddar cheese (-3.5%) and lactose (-18.8%) prices. Butter milk powder and sweet whey powder were not sold at the Nov 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 Nov 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 Nov 17th event declined 0.3% from the previous event while remaining 7.0% lower on a YOY basis. The YOY decline in total quantities sold was the ninth 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 November auctions increased 1.4% from average October volumes sold but remained 7.7% below last year’s average volumes sold for the month of November. Nov ’20 volumes sold for all products finished 8.6% 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 17th event when accounting for differences in butterfat levels as GDT butter prices rebounded to a six month high level. U.S. spot butter prices are currently trading at an 18.7% discount to GDT prices while CME futures prices traded at a 7.0% 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 17th event as GDT cheddar cheese prices declined for the second consecutive auction. U.S. spot cheddar cheese prices are currently trading at a 0.4% premium to GDT prices while CME futures prices traded at a 4.9% premium to GDT prices from Dec ’20 – May ’21.
U.S. nonfat dry milk futures prices remained at a discount to GDT skim milk powder winning prices at the Nov 17th event when accounting for differences in protein values as GDT skim milk powder prices rebounded from the previous event. U.S. spot nonfat dry milk prices are currently trading at a 17.2% discount to GDT skim milk powder prices while CME futures prices traded at a 15.6% discount to GDT skim milk powder prices from Dec ’20 – Apr ’21. Skim milk powder was not sold at the GDT auction for Contract 6 (May ’21).