GDT falls as US milk supply hits record level

After six consecutive positive results, the Global Dairy Trade (GDT) index recorded its first decline since early March at this week’s auction in New Zealand. The benchmark dairy index fell slightly by 0.8%, with an average product selling price of $3,434/t.

The index was dragged lower by a poor showing for whole milk powder (WMP), with average prices down more than 3% to just over $3,000/t. Having made some healthy price gains since March, WMP prices have now posted declines at the last two GDT events.

On the other side of the powder mix, skimmed milk powder (SMP) recorded its third increase in a row, with average prices lifting 1.4% close to $2,220/t. Of the other commodities, fats continued to trade strongly, with New Zealand butter prices increasing 3% to $5,770/t, while the average price of anhydrous milk fat lifted more than 4% to $6,890/t. There were declines in price for cheddar (-4%), lactose (-11%) and casein (-8%).

On the other side of the world, US milk production continues to increase strongly. In April, milk delivery from US dairy farms was more than 8bn litres, which was a 2.2% increase compared with the same month last year and the highest-ever volume of milk produced in the US for the month of April.

This trend continued last month, with close to 8.3bn litres produced on US dairy farms in May, which was a 1.8% increase year-on-year and the highest-ever volume of milk produced in the US for May.