Analysis Milk
Milk fat drops even further at GDT auction
The first Global Dairy Trade of December shows another downward trend. This is the eighth consecutive year. The index is down 4,3%, but there are significant differences between products. The main products at auction – milk powders – are relatively quiet, but milk fat prices are falling further. Meanwhile, cheddar is suddenly rising again.
Read this article?
Become a subscriber and get instant access
Choose the subscription that suits you
Analysts in New Zealand attribute the index's continued downward trend to a global milk oversupply, which is putting pressure on dairy prices in general. However, the supply on the GDT itself has peaked, which seems to be in line with New Zealand's milk production.
Although prices have been under pressure for a long time now, they haven't reached an absolute low yet. Compared to previous years, prices aren't exceptionally low either. The current GDT level is roughly in line with that of early 2024, when the market also experienced a dip.
{{dataviewSnapshot(46_1764752994)}}
Butter
Even for butter, the average price of which has fallen by 12,4% this time (the sharpest drop on this GDT), there is no question of a particularly long-term low, although the price is relatively low.
cheddar
Cheddar prices are rising, countering all the price drops. This is due to increased demand due to the upcoming holidays and New Year's Eve. In the US, this is also driving up Cheddar futures prices.
The Cheddar price on the GDT has been rather erratic in recent months. Sometimes there's a substantial increase, other times a sharp drop in the selling price. The precise reasons aren't always clear.