Analysis Milk
Large supply puts negative pressure on Global Dairy Trade again
The first GDT of October was another auction with a predominantly negative sentiment. With an average decrease of -1,6%, the auction was twice as negative as the previous one. The price of mozzarella, in particular, plummeted again. Butter oil saw a slight increase.
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A substantial volume was auctioned again: a total of more than 42.000 tonnes of product, which is a provisional record for this season.
New price drops were recorded for the main products at auction, whole milk powder and skimmed milk powder. Whole milk powder saw a decrease of 2,3%, while skimmed milk powder saw a modest decrease of 0,5%. It is noteworthy that skimmed milk powder is the cheapest in Europe, while whole milk powder in Europe is still several hundred euros per ton more expensive than in New Zealand.
The prevailing explanation until now was that milk fat was more expensive in Europe than in New Zealand, hence the higher price for whole milk powder. However, that explanation is no longer valid, as butter in Europe is now several hundred euros per ton cheaper than in New Zealand – according to the GDT, around €420 per ton for local products, and roughly up to €300 per ton for products further afield. The average butter price fell by 3%. The price of butter oil (AMF), on the other hand, rebounded slightly.
Once again, the cheeses were the most exciting. Just like at the previous auction, cheddar prices rose slightly, but mozzarella prices fell further, to their lowest point in about two years.