The big news this week is that the Global Dairy Trade (GDT) auction recorded a 4.3% reduction at Tuesday’s auction.

This brings to over 18% the cumulative fall in the index since early August and the number of consecutive price cuts at each auction to eight.

The big drop at this week’s auction was for butter and butter oil, which dropped in price by 12.4% and 9.8% respectively.

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Butter on the GDT is now making €4,439/t, which is actually higher than the European price €4,320/t.

As a proportion of all the 34,000t of product sold at the GDT, butter is a relatively small part of it, with powders making up most of it.

These fell in price too, with whole milk powder (WMP) dropping in price by 2.4% to reach €2,889/t, while skim milk powder (SMP) dropped in price by 1.6% to reach €2,145/t.

These prices are largely similar to the European prices, which saw both WMP and SMP fall this week.

Cuts

There was further price cuts for European butter this week, as the floor continues to drop, with quotes now at €4,320/t.

There is some chatter in the trade that butter will soon be less than €4,000/t, but that pessimism remains to be seen.

In many ways, the falls in the GDT are just lagging what has already happened in Europe, so drops to the GDT are not necessarily further bad news for Irish producers.

For the first time in many months, the Ornua PPI is significantly higher than the Irish milk prices on a cent-per-litre basis when the Ornua value payment is factored in.