Fat products push down Global Dairy Trade

Expectations were not high in advance, given the current winter season in New Zealand. However, dairy exports from New Zealand are continuing well, which could mean that buyers wanted to replenish stocks. The increasing conflict between the United States and China and the heat wave in the European Union could also play a role, according to Greenmark Dairy.

Fat supply increases
Ultimately, supply seems to have been a driving force behind price developments. For example, the supply of butter and cheddar increased by 18% and 30% respectively compared to the previous auction on June 44. The supply of milk fat, the third product on the GDT after whole and skimmed milk powder, remained virtually the same with a small increase of 0,62%.

Especially fat was necessary a feather leave in the value. The price for milk fat fell by 1,9% to $5.433 per tonne, butter lost 4,8% to $4.339 per tonne and Cheddar lost 1,5% to $3.756 per tonne. 

Light in the min
Ultimately, protein could not compensate for these price drops. For example, the value of the largest product at the auction (whole milk powder) at $2.969 per ton remained virtually the same as the quotation of 2 weeks ago. The supply of skimmed milk powder lagged 18,1% behind the auction day in mid-June. The tighter supply translated into a 3,2% higher price to $2.430 per tonne.

Ultimately, the GDT closed with an average price of $3.302 per tonne, down 0,4% from the previous auction on Tuesday, June 18. This means that the auction ends in negative territory for the fourth consecutive time. After having ended up (sometimes heavily) in positive territory on the previous 8 auction days in this calendar year of 2019.