After a four-auction run of positive results, the Global Dairy Trade (GDT) recorded its first negative result since mid-August this week.

At -0.7%, it’s relatively flat and represents a stabilisation of prices more than anything.

Delving deeper, whole milk powder (WMP) fell by 2.7%, while skim milk powder (SMP) increased by 2.3%. There is twice as much WMP sold as there is SMP, so the overall index declined as a result. There was better news for cheddar which increased by 4.5% while butter declined by 1.6%.

The decline in butter prices at the GDT was a surprise, especially when the trend on the European spot market is considered.

Spot market prices for butter soared by €310/t to reach €5,350/t – the highest price since mid-December last year when butter was in freefall.

It seems as though as buyers are in a fight to source supplies in advance of Christmas.

To put the European price in context, butter at the GDT was making €4,585/t when converted from US dollar. But to be fair, it is powders that most buyers are after at that auction.

There is some evidence of butter prices cooling in the US, where they are down 4.3% compared with two weeks ago.

Elsewhere on the spot market, WMP increased by €55/t, while SMP decreased by €65/t.

Overall, the outlook remains more positive than it did a month ago, but the Chinese economy is still under-performing relative to average and while the outlook for China has improved, it has some way to go before it turns around and that’s not good news for dairy exporters.