The most recent Global Dairy Trade (GDT) auction was up another 1.4% this week. The result underpins a rising market, despite good flows of milk at this time of the year from New Zealand.
Since mid-August, the GDT results have been steady or increasing. The auction two weeks ago was up 1.9%. Cumulatively since mid-August, the GDT results are up over 15%.
Whole milk powder (WMP), the most important product at the auction, was up 0.6% to reach over US$4,008/t. Butter was up over 4.6% to hit over $5,700/t.
WMP prices on the European milk market observatory show they are heading for €4,000/t, up between 45% and 50% on the same time last year when they were trending close to €2,700/t.
Cheddar prices from the EU MMO internal market summary show prices are heading over €3,300/t for the last week in November. Butter on EU dairy commodity charts is 50% ahead of the same time last year in terms of price.
This time last year, it was heading for €3,500/t and now it’s heading for €5,250/t. The move is significant and why milk prices at farm level are 5c to 6c per litre ahead of the same time last year. Skim milk powder is 41% ahead.
Global milk supply fell for the second consecutive month in November. Output remains positive on a year-to-date basis, but supply was weaker in most major producing regions.
Supply slowdown has been quicker than expected with rising input costs a major factor, meaning global supply will be flat to slightly weaker in the second half of the year (2021).