GDT index falls 1.1 per cent – sharp cheddar jump prevents steeper decline

After four consecutive auctions of gains, the positive run was broken at the latest global dairy auction on 15 September. A decline in fats and mozzarella pulled the overall index into negative territory, even as a strong rise in the cheddar price took the edge off the downturn.

Following a strong run through late summer, the overall price index on the international dairy trading platform Global Dairy Trade (GDT) took a hit of 1.1 per cent at the auction on 15 September. The average price came in at €3,349 per tonne.

Cheddar surges – mozzarella heads the other way
The world of cheese produced the auction’s sharpest contrast. Cheddar staged a strong comeback, rising by as much as 16.5 per cent to an average price of €3,528 per tonne. That more than reversed the 6.6 per cent decline recorded at the previous auction on 1 September. Mozzarella moved in the opposite direction, falling 6.0 per cent to an average price of €3,456 per tonne, after a modest rise at the previous event.

The major powder categories, which account for the largest volumes traded at auction, held up more steadily overall. Skimmed milk powder (SMP) largely maintained the gains of recent auctions, edging up 0.1 per cent to €3,194 per tonne. Whole milk powder (WMP) saw a smaller decline of 0.8 per cent, ending at €3,086 per tonne. Buttermilk powder (BMP) fell back 0.5 per cent to €3,938 per tonne, whilst lactose dropped 4.3 per cent to €1,553 per tonne.

Milkfat and butter continue to slide
It was above all the milkfat categories that pulled the overall index below zero. Butter took a hit, falling 5.7 per cent to an average price of €4,121 per tonne. Likewise, anhydrous milk fat (AMF) continued its weak trend, falling 3.0 per cent to €4,968 per tonne.

Pause after a positive run
The 1.1 per cent decline halts the recovery the market has seen over the past two months. Since mid-July, four consecutive auctions had delivered overall gains of 1.5 per cent, 0.1 per cent, 2.3 per cent and, most recently, 0.9 per cent on 1 September.

The direction taken by the coming auctions in October will be decisive in determining whether milkfat and powder prices find a more stable footing over the autumn.

By Maja Løvstrup
Graph: Global Dairy Trade