The Global Dairy Trade (GDT) auction dropped on average 3.8% this week, with whole milk powder (WMP) down 4% to $3,246/t and skim milk powder (SMP) down 4.8%.
The previous two auctions showed a slight market recovery, but this week, during the last dairy auction of 2023, price pressure has resurfaced.
The price of SMP fell 4.8% to $2,965/t. This price drop is interesting, because it looked like the European milk powder market seemed to be bottoming out in recent weeks.
Now that GDT prices are falling again, it will make European buyers think twice. New Zealand product is now more competitive.
In this week’s auction, butter and cheese also fell. Butter fell 2.6% to $4,602/t. Cheddar recorded a limited decline of 0.7% to $3,246/t.
On a global level, New Zealand butter remains by far the cheapest.
Expressed in dollars, New Zealand product is about $700/t cheaper.
Cheese prices falling
The cheese market is also falling pretty fast. A lack of demand, combined with an unexpected sharp increase in milk production, disrupted the foundation of high prices.
Meanwhile, the DCA quotations of Gouda and Edam have already dropped well below the limit of €4,000/t.
Cheddar and mozzarella are in the same downward boat.
In 2022, the cheese market was dominated by shortages for a long time, but right now there is a threat of oversupply.
Retailers’ buyers are very reluctant to do business and are waiting for the price drop.