We’ve reached that time of year when product volumes sold on the GDT begin to increase sharply to coincide with the seasonal spike in New Zealand milk output.

At this week’s GDT auction, more than 32,250t of dairy product were offered for sale, which is about 10,000t more than volumes traded over previous months.

However, the benchmark index was dragged marginally lower at this week’s event, posting a 0.4% decline as contractions in the price of whole milk powder (WMP), butter and anhydrous milk fat dragged performance.

Although Fonterra placed more than 17,000t of WMP for sale at this week’s GDT, dairy futures markets were projecting a slight increase in WMP prices this week. However, the opposite occurred, as the average fell back 1% to less than $3,150/t, with September-, October- and November-delivered contracts all recording price declines.

In contrast, skimmed milk powder prices posted a marginal gain of 0.3% to just under $1,970/t following declines at the three previous auctions.

Of the lesser-traded commodities, butter prices fell more than 1% to $5,735/t, while anhydrous milk fat was also back 1% in price. The only commodities to post a gain were cheddar (+1.5%) and casein (+3%). In the US, the USDA has lowered its forecast for 2017 US milk production by 260m litres to 94.5bn litres. Despite increasing dairy cow numbers, the USDA has cited declining milk volume per cow as the reason for this decline.