Global Dairy Trade auction hits 18-month low

Prices on Fonterra’s Global Dairy Trade (GDT) auction have slumped to the lowest level since December 2012, dashing hopes of a recovery.

The average winning price fell 8.9% to US$3,309/t (£1,931) on Tuesday 15 July – the second successive drop after a slight rise in mid-June.

Supplies were 12% tighter overall, with 36,656t of products sold.

All commodities suffered falling prices, with whole milk powder, skim milk powder and anhydrous milk fat seeing the sharpest declines.

Focus will now shift to the British dairy processors who will announce any farmgate price changes for August and September in the next fortnight, having previously blamed slipping global commodity prices for cuts this spring.

See also: Top 20 global dairy companies revealed

Individual product results were:

• Butter sold at a weighted average price of US$3,144/t (£1,835) and the index was down 1.1%
• Cheddar sold at a weighted average price of US$4,164/t (£2,432) and the index was down 1.6%
• Anhydrous milk fat sold at a weighted average price of US$3,250/t (£1.897) and the index was down 10%
• Butter milk powder sold at a weighted average price of US$4,426/t (£2,583) and the index was down 4.6%
• Skim milk powder sold at a weighted average price of US$3,516/t (£2,502) and the index was down 7.1%
• Whole milk powder sold at a weighted average price of US$3,088/t (£1,802) and the index was down 10.9%
• Rennet casein sold at a weighted average price of US$9,761/t (£5,700) and the index was down 8.9%
• No lactose or milk protein concentrate was offered

GDT – owned by New Zealand co-op Fonterra – holds two online auctions a month, with dairies from Europe, India, USA, New Zealand and Australia selling commodities to buyers from more than 90 countries.

Arla started selling British skimmed milk powder from Westbury at the auction in December and earlier this year announced it was also offering British butter milk powder.