The Global Dairy Trade (GDT) was down 1% again this week, which means this is a better performance than the last auction, which was down 3.3% two weeks ago.

However, it means this is the fifth auction in a row (over 10 weeks) to have been negative or on par at best.

Remember, the auction is the best we have to see where powder prices are moving. Thankfully, milk powder prices are moving relatively modestly, but both are down.

Skimmed milk powder (SMP) was down 0.6% to $2,503/t. Whole milk powder (WMP) was down 1.5% to average $3,100/t.

On balance, the average price for this week’s auction fell by 1% to $2,289/t.

The volumes traded rose over 25,000t for the second auction in a row, the highest level since March.

At the previous auction earlier in July, the butter price fell sharply, but this time, the cheddar price fell over 10%.

How are the negative GDT results affecting supply? European milk production increased by 0.8% in the first four months of this year. The likelihood is this trend will reverse and there will gradually be less milk produced in the EU. The European Commission suggests milk production over the whole of this year will be about 0.2% lower than last year.

In a short-term forecast, the EU says butter and SMP prices have been competitive lately and that this is expected to improve further. It also suggests milk supply will decrease due to extra cow slaughterings given the cost of production relative to milk price. It foresees 2% fewer dairy cattle.