Executive Summary

Dairy product prices declined slightly during the GDT event held Jun 1^st. Highlights from the most recent auction include:

• The GDT Price Index declined 0.9% at the Jun 1^st event, finishing lower for the fifth time in the past six auctions but remaining just 5.3% below the seven year high level experienced throughout the first auction of Mar ’21.
• Declines in prices within the Jun 1^st event were widespread across products offered with the exception of cheddar cheese. Whole milk powder prices declined to a three month low level throughout the Jun 1^st event while skim milk powder prices declined from the six and a half year high level experienced throughout the previous event. Butter prices declined to a five month low level throughout the Jun 1^st event however cheddar cheese prices finished higher for the second consecutive event.
• Total quantities sold for all products at the Jun 1^st event rebounded seasonally from the 12 month low level experienced throughout the previous auction while finishing 3.9% above previous year figures. Jun ’21 volumes sold for all products are on pace to reach a five year high seasonal level.

Additional Report Details

Dairy product prices declined 0.9% within the Global Dairy Trade (GDT) event held Jun 1^st, finishing lower for the fifth time in the past six auctions but remaining just 5.3% below the seven year high level experienced throughout the first auction of Mar ’21. 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 remained 41.0% above previous year price levels at the Jun 1^st auction, reaching an eight year high seasonal level. The GDT Price Index finished 27.7% above the three year average price for the first auction of June, finishing above three year average figures for the 14^th consecutive event.

Within the latest auction, declines in prices were led by butter milk powder (-7.5%), followed by butter (-5.4%), lactose (-1.6%), anhydrous milkfat (-0.8%), whole milk powder (-0.5%) and skim milk powder (-0.5%). Cheddar cheese (+0.5%) prices finished higher throughout the Jun 1^st event while sweet whey powder was not sold.

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 28^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 Jun 1^st event rebounded 8.0% from the 12 month low level experienced throughout the previous event while finishing 3.9% above previous year figures. The weekly YOY increase in total quantities sold for all products was the sixth experienced in a row. Total quantities sold had finished lower on a YOY basis over 16 consecutive events through the first auction of March, prior to increasing on a YOY basis throughout the six most recent auctions. Total quantities sold typically reach seasonal low levels throughout the month of May, prior to increasing seasonally throughout the next several months.

Volumes sold for all products within the first auction of June increased 5.8% from average May volumes sold while finishing 5.2% above last year’s average volumes sold for the month of June. Jun ’21 volumes sold for all products are on pace to reach a five year high seasonal level.

U.S. butter prices remained at a discount to GDT winning prices at the Jun 1^st event when accounting for differences in butterfat levels, despite GDT butter prices declining to a five month low level. U.S. spot butter prices are currently trading at a 12.8% discount to GDT prices while CME futures prices traded at a 9.3% discount to GDT prices from Jul ’21 – Dec ’21.

U.S. cheddar cheese prices remained at a discount to GDT winning prices at the Jun 1^st event as GDT cheddar cheese prices rebounded from the previous event. U.S. spot cheddar cheese prices are currently trading at a 21.0% discount to GDT prices while CME futures prices traded at a 6.3% discount to GDT prices during Sep ’21 – Dec ’21. Cheddar cheese was not sold for Contract Periods 1 and 2.

U.S. nonfat dry milk futures prices remained at a discount to GDT skim milk powder winning prices at the Jun 1^st event when accounting for differences in protein values, despite GDT skim milk powder prices declining from the six and a half year high level experienced throughout the previous event. U.S. spot nonfat dry milk prices are currently trading at an 18.9% discount to GDT skim milk powder prices while CME futures prices traded at a 15.9% discount to GDT skim milk powder prices from Jul ’21 – Nov ’21. Skim milk powder was not sold for Contract Period 1.