Global Dairy Trade: Prices drop 1 per cent across the board

The GDT overall index hasn’t increased since May 2. File photo / Derek Flynn

Prices have once again softened in the latest Global Dairy Trade auction, held overnight, with a 1.0 per cent decline across the board.

The overall index now hasn’t seen an increase since May 2 and is sitting at levels last seen in September 2020.

Whole milk powder, which peaked in March 2022 at US$4757/MT, fell 1.5 per cent to an average of US$3100/MT – US$49 less than two weeks ago.

Skim milk powder – Fonterra’s second-biggest reference product – was down 0.6 per cent to an average of US$2503/MT.

However, the biggest percentage fall came from cheddar, which plunged a whopping 10.1 per cent to an average of US$3955/MT.

This follows a 3.1 drop at the previous event and takes cheddar to prices not seen since July 2021.

Butter backed up a 10.3 per cent fall last event, with a further 2.7 per cent decline, to an average of US$4705/MT – a stark contrast after jumping 5.5 per cent to an average of $5379/MT last month.

Anhydrous milk fat was the only product to buck the trend, with a 3.4 per cent increase to an average of US$4745/MT.

Lactose was not offered at this event, while figures for butter milk powder were not available.

25,956MT of product was purchased by 118 successful bidders, compared to 24,837 and 140 winning bidders last time.

On May 25, Fonterra announced an opening 2023/24 season forecast Farmgate Milk Price of between $7.25 - $8.75 per kgMS, with a midpoint of $8.00 per kgMS.

The co-op also narrowed the forecast range for the 2022/23 season from between $8.00 - $8.60 per kgMS to $8.10 - $8.30 per kgMS and reduced the midpoint from $8.30 per kgMS to $8.20 per kgMS.

FY23 full-year forecast normalised earnings were increased to between 65 - 80 cents per share, from 55 - 75 cents per share.