The GDT auction result this week did little to reinforce the slightly lower price pressure evident on markets over the last number of weeks. For the previous four auctions we had seen a stabilising of markets – a 3.2% lift in February coupled with three auctions very close to holding price.

However, this week we see prices of dairy products such as butter, cheese and milk powder have fallen considerably on the Global Dairy Trade (GDT) that took place on Tuesday. It was early January since we had a fall of this magnitude.

The average price dropped 2.6% to $3,361 per tonne. The fall in cheddar prices (down 10.2%) in particular contributed to the loss. This is related to the fact that cheddar was relatively highly priced prior to auction.

Other key products were also down. Butter was down 3% but, interestingly there was a decrease of only 1.5%, for whole milk powder, which was the smallest mover. Remember the auction is a good indicator of whole milk powder markets so that is the sliver of positivity in the Tuesday result.

Overall, the result can be seen as the most recent indication that there is little buying interest or demand on the world market. China is probably the game changer and with milk supply growing there and the COVID-19 fallout still hanging over demand, it’s keeping a lid or even a downward pressure on markets.

The impact of this result on spring milk price in Ireland won’t be felt for another few weeks and processors will be watching the next result with keen interest on 4 April before setting March milk price.