Butter and AMF fall sharply at latest GDT auction, while cheese and powders show a more mixed development.

Global dairy prices declined at the latest auction on Global Dairy Trade (GDT), where the price index fell by 2.7 per cent to an average of EUR 3,523 per tonne.

The decline was primarily driven by fat-based products. The price of anhydrous milk fat (AMF) dropped by 9.6 per cent, while butter fell by 7.9 per cent. This points to weaker demand for fat in the market, which significantly affects the overall price level.

Mixed picture across product categories
Developments were more nuanced across the other product groups.

In the cheese market, cheddar increased by 1.1 per cent, while mozzarella declined by 3.1 per cent. The powder market also showed mixed trends: skimmed milk powder rose by 3.2 per cent, while whole milk powder edged down by 0.6 per cent.

Lactose prices increased by 7.2 per cent, while buttermilk powder was not traded at the auction.

Pressure from fat may have wider implications
That fat-based products are driving the decline is significant for dairy processors, as butter and milk fat are often key value drivers in the composition of milk.

GDT auctions are widely used as a benchmark for the global market balance, and developments in the fat segment are therefore closely monitored by the industry, as they may influence both product mix and milk settlement prices.

By Maja Løvstrup
Source: globaldairytrade.info
Screenshot: globaldairytrade.info