Following the auction results, whole milk powder prices dropped sharply, while price growth for butter and cheeses slowed down. Increased freight costs likely hindered buyer activity in export markets.
On Tuesday, March 17, the 400th GDT auction took place. The price index settled at 1273, representing a marginal increase of 2 points (+0.1%) compared to the previous trading event. The average price for dairy products was $4,330 per tonne, up by $29 from the previous auction. A total of 19,500 tonnes of commodities were sold, an increase of 639 tonnes over the last event. The minimum supply was recorded at 17,844 tonnes, and the maximum at 21,831 tonnes. 155 dairy market operators participated in the auction, 10 companies fewer than on March 3.
Повідомлення Gemini
Оскільки ця публікація присвячена результатам глобальних торгів (Global Dairy Trade) і містить детальний ринковий аналіз, я використав офіційно-діловий стиль (Official Business). Термінологія приведена у відповідність до міжнародних звітів USDA та GDT.
GDT Auction: Price Growth Slowed by Whole Milk Powder
Following the auction results, whole milk powder prices dropped sharply, while price growth for butter and cheeses slowed down. Increased freight costs likely hindered buyer activity in export markets.
On Tuesday, March 17, the 400th GDT auction took place. The price index settled at 1273, representing a marginal increase of 2 points (+0.1%) compared to the previous trading event. The average price for dairy products was $4,330 per tonne, up by $29 from the previous auction. A total of 19,500 tonnes of commodities were sold, an increase of 639 tonnes over the last event. The minimum supply was recorded at 17,844 tonnes, and the maximum at 21,831 tonnes. 155 dairy market operators participated in the auction, 10 companies fewer than on March 3.
Based on the results, the price for Anhydrous Milk Fat (AMF) was $7,602 per tonne, an increase of 6.4% compared to the previous auction. Prices were likely influenced by the end of the seasonal peak in raw milk production in New Zealand. According to the USDA, milk fat prices in Europe rose within the upper range. GDT forecasts suggest AMF could increase by 4.5% in April and by 7.1% in May.
The price of Butter at this auction was $6,868 per tonne. A certain stabilization in butter prices may be linked to a slowdown in buyer activity amid rising freight costs caused by the war in the Persian Gulf region and the increasing price of oil and fuel. According to the USDA, butter is selling actively in European retail chains ahead of Easter, but demand for European goods has slowed in other regions. U.S. dairy processors are building up butter stocks, taking advantage of a significant raw milk supply. Demand for butter in the U.S. is active in retail and the food industry; however, food industry enterprises are purchasing smaller volumes than last year. Demand for U.S. butter remains active in export markets as products from other regions are more expensive. Auction organizers expect the price of butter to increase by 0.5% in April and potentially decrease by 2.5% in May.
The price of Whole Milk Powder (WMP) was $3,709 per tonne, decreasing by 4% compared to the previous auction. According to the USDA, demand for WMP is mostly active in export markets, but some buyers are deterred by rising transportation costs amid higher oil prices due to the war in the Persian Gulf. WMP prices strengthened in Oceania, the U.S., and Europe due to seasonal declines in yields, but demand slowed in Asian countries (excluding China), and shipments to North African countries dropped sharply. However, South American suppliers anticipate stronger demand for WMP in Algeria, likely linked to the approaching end of Ramadan in Muslim countries on March 19. Auction organizers forecast a price decrease of 4.2% in April and 4% in May.
The price of Skim Milk Powder (SMP) was $3,409, up 5.2% from the previous auction. As reported by the USDA, SMP from Oceania was priced higher than the European product. New Zealand’s skim milk powder exports decreased at the beginning of the year due to lower shipments to China, partially offset by moderate growth in exports to other markets in Asia and the Middle East. Milk production in South America is declining seasonally; sellers report stable or stronger demand for March deliveries. Interest in European SMP from other regions remains high. Demand for U.S. SMP is stable domestically and in export markets. According to GDT forecasts, SMP may appreciate by 5.9% in April and 4.5% in May.
Cheddar Cheese rose to $4,925 per tonne (+0.1%), while Mozzarella increased to $4,208 per tonne (+0.5%). According to the USDA, cheese demand is active in retail but weaker in the food industry. In export markets, demand for U.S. cheeses remains stable. U.S. manufacturers are utilizing export opportunities to clear excess cheese from warehouses. However, as per the USDA, rising freight rates could negatively impact international buyer interest. Lower prices for European cheeses contributed to increased demand in export markets during the first quarter. Cheddar prices rose in Oceania amid export demand. Organizers expect Cheddar to increase by only 0.9% in April and decrease by 0.1% in May, while Mozzarella may rise by just 0.2% in May.
Lactose decreased in price to $1,450 per tonne (-0.3%). In spring, demand for pharmaceuticals typically declines after the winter peak but is partially sustained by the allergy season. According to the USDA, U.S. stocks are limited. Lactose supply contracts have been secured for nearly the entire second quarter. Auction organizers forecast a 0.3% price decrease for lactose in May.
The next GDT auction will take place on April 7.
Press service of the Association of Milk Producers
Follow us on LinkedIn
Related News: