The GDT continued its difficult run with average dairy prices dropping by 0.7% at Tuesday’s auction in New Zealand. After this week’s auction, the benchmark dairy index is now at its lowest point in almost two years following a string of negative dairy auction results over the summer.

This week’s GDT auction was led lower by continued weakness in the price of whole milk powder (WMP). Average prices for WMP declined more than 2% this week to just over $2,820/t (€2,440/t), which is the seventh decline in WMP prices out of the last eight GDT auctions.

Dairy commodity

WMP is the most important dairy commodity sold on the GDT platform, accounting for more than 50% of product volumes sold. Butter prices also recorded a drop in selling price at this week’s GDT to hit its lowest level since December 2016.

Butter prices fell 3% at this week’s GDT to hit $4,270/t (€3,700/t). Compare this to Europe where a tonne of butter is currently trading at €5,400 on spot markets. The disparity between dairy fat prices in Europe and the rest of the world shows no sign of narrowing.

Of the other commodities sold on the GDT platform, cheddar cheese prices increased by more than 4% this week to $3,630/t (€3,150/t), while skimmed milk powder (SMP) prices increased by more than 2% to break the $2,000/t (€1,735/t) mark. Almost 39,000t of dairy product were sold at this week’s GDT auction.