The four-month-long winning run of the GDT index finally came to an end this week, after the benchmark dairy auction recorded a near 4% decline in average dairy prices.

This week’s dip in average dairy prices comes as no surprise following the GDT’s recent bull run, particularly for milk powder prices.

However, the GDT index remains in very strong territory and is at its highest level since 2014 – a good omen for milk prices this year.

The fall in dairy prices at this week’s auction was led by a 6% drop in the average price of whole milk powder (WMP) to just over $4,000/t (€3,430/t). The retreat in WMP prices this week is no surprise, following the 21% spike in WMP prices at the last GDT auction.

In contrast, the price of skimmed milk powder (SMP) increased almost 1% this week to $3,350/t (€2,815/t), while butter prices fell 3% to $5,660/t (€4,760/t).

Closer to home

Closer to home, weak milk production in the early weeks of 2021 and strong demand continue to support European dairy markets.

Rabobank is also forecasting moderate supply growth in Europe this spring, which will definitely underpin markets.

Spot market prices for European butter increased again this week to €4,150/t, while cheese markets are broadly stable in the last week.

Cheddar prices remain in a really healthy position at €3,370/t, while mozzarella prices have increased above €3,100/t. On the milk powder side, the price of European-sourced SMP is now fast approaching €2,500/t - its highest level in over a year.