Global Dairy Trade slows down

The market was eagerly awaiting the first Global Dairy Trade of this month to see whether the good sentiment could be maintained. This does not work, but the auction result does provide a more mixed picture than what you would expect based on the average price drop of 0,7%.

Cheddar and milk powder
For example, cheddar rose by 4,5% to just above $4.000 per tonne. This revival is not completely unexpected, because in previous auctions cheddar was the dissonant when the market rose sharply. The improving cheddar price therefore appears to be a correction. The divergent mutations between whole and skimmed milk powder are also striking. Where full fat is declining, skimmed milk powder is gaining ground. Yet the upside potential for skimmed milk powder appears limited. The prices for the supply contracts in the new year are at a lower level than for December, as becomes apparent when you zoom in on the details. 

Butter
Butter prices fall by 1,6% to $4.890 per tonne. This could be a signal that the rapidly rising European butter market is also about to cool down. Due to the revival, European products had once again become more expensive than products from New Zealand. Especially now that New Zealand is entering the milk production season, such a price difference is starting to weigh more heavily on the world market.