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The GDT recorded its fourth consecutive negative result at this week’s auction in New Zealand. The benchmark dairy index declined a further 3.4% , following the 3.5% decline recorded in early November and is now at its lowest point since early March.
This week’s decline was a result of further weakness in powder prices.
The average price of whole milk powder (WMP), which is the most important product traded on the GDT, fell almost 3% to less than $2,800/t (€2,370/t). WMP prices are now at their lowest level since October 2016.
New lows for SMP
Skimmed milk powder (SMP) preformed even worse this week, with average prices falling close to 7% to $1,700/t (€1,450/t). This decline follows a similar trend in Europe over recent weeks where prices are finding new floors.
SMP prices from the Dutch Dairy Board are down to lows of €1,460/t, which is well below the EU’s intervention price floor.
Algeria’s government dairy buying agency ONIL is believed to have bought close to 40,000t of European SMP last week for a price in the region of €1,430/t.
Butter prices at this week’s GDT fell 6% to less than $5,150/t (€4,400/t). In Europe, spot butter prices firmed slightly to between €5,000/t and €5,500/t.
The news that Dutch milk production in October was up 1.4% year on year to 1.13bn litres will also not have helped market sentiment. US production was also up for October by 1.4% to 7.8bn litres.
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