Global Dairy Trade commodity prices increase after five-month freefall

Prices on the Fonterra-owned Global Dairy Trade (GDT) auction platform rose today for the first time since March.

The GDT Price Index – a weighted average of percentage changes in prices – increased 14.8% at today's bi-monthly auction, with an average selling price of US$1,974 per tonne.

Volumes were, however, down 20.7% at 36,904 tonnes from 46,527 tonnes on August 4.

Prices for anhydrous milk fat (AMF), butter, cheddar, rennet casein, skim milk powder (SMP), and whole milk powder (WMP) at today's GDT auction increased.

Butter milk powder (BMP) and lactose prices were, meanwhile, down. 

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During the last bi-monthly auction, on August 4, the Price Index fell 9.3% - the tenth consecutive fall in prices. 

Two days later, on August 7, it was announced that US dairy giant Land O'Lakes had formally withdrawn from the auction platform. 

On August 13, Fonterra announced it had reduced its GDT volume forecast for the next 12 months by 56,045 tonnes.

It plans to cut its offering by 62,930 tonnes over the next three months, but will add 6,885 tonnes on later this year “in anticipation of changing market conditions.”

“In response to current conditions in the global dairy markets, we have further modified our product mix to shift volumes away from base whole milk powder (WMP) and into our other products in our portfolio such as value-add ingredient, consumer and foodservice,” Kelvin Wickham, managing director of global ingredients, Fonterra, said on August 13.

Seven sellers - Amul (India), Arla Foods (Denmark), Arla Foods Ingredients (Denmark), DairyAmerica (USA), Euroserum (France), Fonterra (New Zealand) and Murray Goulburn (Australia) – continue to offer commodity dairy products.