Following the GDT auction results, the prices for most dairy products increased, although prices for butter and Cheddar cheese declined.
On Tuesday, May 5, the 403rd GDT Auction took place, resulting in a price index of 1214, which is 18 points (+1.5%) higher compared to the previous auction. The average price for dairy products was 4,127 USD/mt, down 16 USD from the previous results. During the auction, 13,743 tons of commodities were sold, which is 1,250 tons less than the last auction. The minimum supply was recorded at 13,068 tons, and the maximum at 17,289 tons. 167 dairy market operators participated in the auction, which is 20 companies more than on April 21.
According to the results, the price for Anhydrous Milk Fat (AMF) was 6,461 USD/mt, up 1.1% compared to the previous auction. A reduction in the supply of the commodity and an increase in the number of participants likely contributed to the slight price growth. However, fat prices remain under pressure due to increased milk supply on the global market. The New Zealand cooperative Fonterra reported an increase in raw milk production, which is expected to bring additional volumes of dairy products to the market. According to the GDT forecast, AMF prices may increase by 1.3% in June and 1.6% in July.
The price for Butter at this auction was 5,525 USD/mt, down 2.6% compared to the previous auction. According to Dairy Reporter, butter prices have dropped sharply year-on-year despite signs of a short-term recovery in key export markets. As reported by the USDA, butter production in the U.S. is rising; while retail demand remains stable, sales to the food processing industry are lower than the same period last year. American butter is in high demand in export markets due to its lower price compared to products from other regions.
The current high level of butter production is explained by a milk surplus and limited capacity for higher-margin products; however, if the milk supply shrinks, the production of butter and milk powder will rapidly decrease. Low butter prices benefit large industrial buyers and the foodservice sector after the difficult 2023–2024 period, when high prices forced manufacturers to bear costs and consumers to switch to cheaper brands or smaller packages. Notably, bakeries are already purchasing butter for delivery through 2027 at lower prices. Lower prices are stimulating a recovery in retail butter sales in Germany, where the price has already dropped to 5.80 EUR/kg. Auction organizers expect the butter price to decrease by 2.5% in June and 1.9% in July.
The price for Whole Milk Powder (WMP) was 3,741 USD/mt, an increase of 2.2% compared to the previous auction results. According to Farmer’s Journal, in the last week of April, WMP prices in Europe were stable and unchanged from the previous week. As reported by the USDA, prices for the commodity remained unchanged in the U.S. in the lower price range but rose in the upper range. According to Edairy News, demand for the commodity in export markets remains mixed despite the increased supply of dairy products.
Some markets show resilience, while others see demand slowing due to inflation and changes in consumer behavior, which affects pricing and trade flows, creating more challenging conditions for dairy processors and exporters. The role of the raw milk price driver is shifting from butter and milk powder to protein ingredients such as whey proteins, isolates, and lactoferrin. Auction organizers forecast a price increase of 1.9% in June and 2% in July.
The price for Skim Milk Powder (SMP) was 3,547 USD/mt, up 3% compared to the previous results. According to Food Business News, SMP and whey prices are supported by stable demand, limited supply, and investments in new production capacities. In April, the spot price for SMP in Europe rose by 125 EUR/mt (to 2,775 EUR/mt). This growth is attributed to both a reduction in stocks and steady demand within producing countries and export markets, despite the seasonal increase in milk production.
According to the USDA, SMP demand has weakened in the U.S. market but remains active in export markets. Mexico is the largest buyer of American milk powder, absorbing nearly half of all its exports. Southeast Asia also remains an active destination for SMP exports. In the future, milk powder market dynamics will depend on demand stability. According to the GDT forecast, SMP prices may rise by 4.2% in June and 2.7% in July.
Cheddar cheese fell to 4,611 USD/mt (-3.6%), while Mozzarella rose to 4,010 USD/mt (+4.7%). As reported by Farmer’s Journal, in late April, Cheddar prices in Europe dropped to 3,430 EUR/mt. Irish cooperatives have switched to Mozzarella production as it requires less aging time and can be sold faster than Cheddar, which must age for at least six months. According to Dairy Herd, the U.S. has the highest per capita cheese consumption (19.3 kg per year), followed by Canada (14.5 kg), the UK, Australia, New Zealand, and Argentina (ranging from 12.5 to 9.4 kg). According to a FASreport, per capita cheese consumption in South Korea has nearly doubled over the last ten years in both the consumer and food processing sectors.
According to the USDA, demand for American cheeses is active in export markets and has strengthened among food processing companies using cheese as an ingredient. The drop in U.S. cheese prices early in the year stimulated demand and sales in retail and the HoReCa segment. The U.S. is increasing its cheese production and export volumes. However, to remain competitive, the U.S. must maintain attractive prices compared to European products. In the short term, traders do not expect cheese to drive sharp price spikes, but in the long term, cheese could become a factor in driving dairy prices higher. Organizers expect Cheddar to decrease by 2.1% in June and 5.9% in July, while Mozzarella may rise by 4.7% in July.
Lactose increased to 1,522 USD/mt (+3.7%). According to the USDA, demand is active, and prices are strengthening in both the lower and upper ranges of the U.S. market. According to the GDT forecast, lactose may rise by 3.7% in July.
Buttermilk Powder (BMP) rose to 3,467 USD/mt (+9%). According to the USDA, demand for BMP remains stable in export markets. However, higher prices are restraining buyer activity, with purchases limited to short-term needs. Organizers expect BMP to rise by 17.3% in June and 6.8% in July.
The next GDT Auction will take place on May 19.
Press service of the Association of Milk Producers
Follow us on LinkedIn
Related News