Global Dairy Trade prices rise by a super dot

The average price on the 279 auction day of the GDT amounts to US$4.231 per tonne, an increase of no less than 15% compared to the previous auction day on February 16th. An increase in price by such percentages is rare and has not occurred in the last 5 years anyway. Since the auction day of November 17, the average price has been on the rise, but each time by percentages of 1,8 to 4,8%. The average dairy price on the GDT has already increased by 2020% since mid-November 40.

Although dairy quotations in Europe (e.g the DCA quotations last week) and the futures market in the United States and New Zealand are also mainly looking upwards, an increase in these proportions was not obvious. For example, although the supply at the GDT was more than 10% lower than on the previous auction day, this does follow the annual seasonal trend. The milk supply in New Zealand also does not seem to be a mood changer on this point. This also follows the seasonal trend and even reaches its highest point since 2017 in January.

Strongest price risers
However, the supply at the GDT does seem to have an impact on prices and enthusiasm, with buyers driven by the corona crisis likely filling many short-term orders. Both the volume of butter (-22,5%) and whole milk powder (-16%) were considerably lower than the previous auction day. Not entirely coincidentally, these are also the products that have risen the most in price, relatively speaking. Whole milk powder, of which Fonterra is the supplier, increased in price by no less than 21% to $4.364 per tonne. This is by far the highest price for whole milk powder in the last 5 years.

Butter has increased in value by 13,7% to an average price of $5.826 per tonne. This puts butter at around the price level of September 2017. Skimmed milk powder, the export of which from New Zealand is not entirely smooth, increased in price by 3,5% to $3.302 per tonne. This is also easily the highest level in the last 5 years. Milk fat also receives a positive boost and rises 7,4% in value to $5.929 per tonne, reaching the level of exactly 2 years ago (2019). 

Competitive on global dairy market
Lactose offered in modest volumes also rose in price: by 4,9% to $1.278. Only buttermilk powder (BMP), also offered in a small volume, drops slightly in value on this auction day: by 0,3% to $3.144 per tonne. The big question now is how long the GDT can maintain the upward movement, especially after this mega hit. New Zealand auction price levels are now close to those in the United States and the European Union (EU), increasing competition in the global dairy market.

Dutch dairy farmers wonder why their buyers' milk prices are not increasing in proportion to those of the GDT. Dairy specialist Mark Voorbergen has an answer to that he got up earlier Boerenbusiness revealed.