The latest Global Dairy Trade (GDT) auction result saw whole milk powder (WMP) lift 0.1% to remain at $3,400/t and, on average, the auction result was up 0.6% to $3,610/t.

All eyes will be on the milk powder result and the purchasing activity from China in particular, as some COVID restrictions were softened last weekend, allowing the potential for more demand as further restrictions ease.

The GDT results reinforce the theory that the dairy commodity market has bottomed out after recent falls, as the mid-November auction was also pretty steady, lifting 2.4% on average. Volumes traded in the auction are still pretty good at 30,000t.

Butter dropped in price in the GDT, by 1.9%, to $4,725/t, but the rest of the products were up. On European markets, butter prices are clearly in a downward spiral. The price pressure that started towards the end of September is still ongoing. Since September, about €1,500/t has been taken off.

The ZuivelNl quotation is already below the level of €5,500/t, while the DCA quotation is still just above that, but it will probably also fall.

The Ornua purchase price index (PPI) for the month of November is 171.8 (52c/l, VAT inclusive based on Ornua’s product purchase mix and assumed member processing costs of 9.5c/l and excluding member margin), down about 6.5% from 183.7 in October.

The energy cost element of the processing cost is variable and changes each month depending on energy costs. In addition, the Ornua value payment payable to members in the month is €4.3m (3.9% of gross purchases in the month - 3.7% year to date).