Analysis dairy business
Price fall leads Global Dairy Trade to low point
The prices of dairy products such as milk powders and butter fell sharply on the auction day of the Global Dairy Trade (GDT). As a result, the GDT Price Index has reached its lowest point in almost five years. The New Zealand dairy auction continues to follow the negative trend that started at the beginning of July.
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The GDT Price Index this trading day amounts to 850 points, a drop of no less than 7,4% compared to the previous auction day on August 1 of this year. Then prices fell by an average of 4,3%. This means that the price index is close to November 20, 2018, when it stood at 846 points. By the way, this was a temporary dip. For really structurally lower prices we have to look at the years 2014 to 2016.
It is striking that both milk powders and fat products fell sharply in value. The biggest blows fell on whole milk powder, of which by far the largest range is presented at the GDT. Whole milk powder fell as much as 10,9% in price to an average of $2.548 per tonne. That is the lowest level since the autumn of 2016. Skimmed milk powder, the second product on the GDT, also suffered a decline of 5,2% to $2.333 per tonne. But butter and butter concentrate (AMF) were also not bright spots. Butter fell 3% to average $4.539 per tonne, while butter concentrate fell 5,3% to $4.452 per tonne.
The volume sold at the GDT amounted to 33.580 tons. This is the highest volume since November 17, 2020. The supply at the auction has increased significantly in the last auction days, but that is normal at the GDT during this period. Only in the last two years has this been different, partly due to the logistical disruptions following the corona crisis and the war in Ukraine.