Tag: GDT

GDT Auction & Farmgate Prices Fall

The GDT average index price fell by 1.2% at the auction held on 20th March to $3,632.  This follows a 0.6% drop in the event held on 6th March and is the third consecutive decline.

After seeing a 0.8% fall at the auction held at the beginning of March, the first drop in 2018 for WMP, the product actually saw a 0.1% increase at the latest event.  WMP made up over half of all the products sold, but SMP, contributing to a about a quarter of the products sold, was down by 8.6% compared to the event earlier in the month to $1,887.  However, this was perhaps more of a re-balancing exercise after the product rose by 5.5% at the previous event.  It is now back in line with February’s prices which averaged $1,882 per tonne.  At the beginning of March the EU Commission sold 4,337 tonnes of intervention SMP for only €1,100 per tonne, this is below the feed grade price of SMP and will do nothing to help current markets.  The Commission has around 380,000 tonnes still in stock.

Often seen as the bellwether for the dairy industry, the recent declines in the GDT will not support UK farmgate prices.  Further reductions have been announced, some of the more notable ones include:

  • Muller and Arla Direct contracted producers will both receive a 1.5ppl price cut as from 1st April.  This could mean Arla producers will be receiving the lowest GB farmgate milk price as from the beginning of next month.
  • Glanbia Cheese and suppliers to Belton Cheese will also see a 1.5ppl price cut, as will suppliers to Yew Tree Dairy and Joseph Heler Cheese
  • Dairy Crest Davidstow and Crediton Dairy have both announced a 1.25ppl reduction as from 1st April.

GDT Results

The average index price for the Global Dairy Trade (GDT) auction held at the beginning of February increased by 5.9%; the third consecutive rise.  However, the latest event, held on 20th February, recorded a small decline; -0.5%.  SMP, which made up about a quarter of all product sold, was down by 3%, compared to the price earlier in the month.  Only a small amount of butter was traded and this saw an increase of 1.1%.  WMP, which made up just over half of all the products sold, was marginally higher, by 0.3% compared to the auction on 6th February.

GDT Up

The GDT average index has increased at both auctions held in January.  This is the first significant increase since back in September (there was a 0.4% rise in December).  At the beginning of January, the index was up by 2.2% compared to the previous auction and at the event held on 19th January it saw a further increase by 4.9%.  All products saw a rise, in particular Butter (8.8%), SMP (6.5%) and WMP (5.1%).  Drought conditions in New Zealand has seen Fonterra reduce its production estimates for the country by 4%.  Consequently Fonterra has reduced the volumes being put forward to auction.  The purchaser collects around 85% of New Zealand’s milk.