New Zealand’s Global Dairy Trade (GDT) may be a harbinger of U.S. milk prices this coming fall and winter. On Tuesday, July 19, the every-other-week dairy trading platform posted its eighth session where dairy product prices traded lower when compared to the previous event. Dating back to March 1, 2022, only one session traded higher. That was the June 7 GDT auction where prices inched up by 1.5%.

At the Tuesday, July 19 GDT auction, the average price for dairy ingredients fell 5% when compared to the July 5 session. That marked the largest drop dating back to the 8.5% downturn on May 3. While all dairy product categories traded lower on July 19, Cheddar cheese was off the least at 2% and skim milk powder (SMP) dropped the most at 8.6%. Overall, cheese traded for $2.19 per pound and SMP fetched $1.68.

Comparing March 1 to July 19

At the start of March, the bundle of dairy products traded at GDT sold for $5,065 per metric ton or $2.30 per pound. To be fair, those were the highest GDT prices since March 2014. By July 19, that number tumbled to $4,166 per metric ton or $1.89 per pound.

GDT trading activity is a valued industry benchmark as New Zealand is the world’s largest dairy product exporter. Prices at the auction tend to track closely with dairy product sales throughout Asia. Overall, about 7% of the world’s milk production gets traded internationally.

Here is a product-by-product comparison since GDT reached the market peak on March 1:

• GDT Price Index down 17.8%. — March 1: $2.30 per pound ($5,065 per metric ton) and July 19: $1.89 per pound ($4,166 per metric ton)

• Cheddar cheese down 24.5%. — March 1: $2.90 per pound ($6,394 per metric ton) and July 19: $2.19 per pound ($4,825 per metric ton)

• Skim milk powder (SMP) down 17.3%. — March 1: $2.03 per pound ($4,481 per metric ton) and July 19: $1.68 per pound ($3,709 per metric ton)

• Whole milk powder (WMP) down 21.3%. — March 1: $2.16 per pound ($4,757 per metric ton) and July 19: $1.70 per pound ($3,757 per metric ton)

• Butter down 21.8%. — March 1: $3.21 per pound ($7,086 per metric ton) and July 19: $2.51 per pound ($5,530 per metric ton)

• Anhydrous milkfat down 21.9%. — March 1: $3.20 per pound ($7,048 per metric ton) and July 19: $2.53 per pound ($5,580 per metric ton)

To learn more about the changing dairy markets, read Trepidation has begun to grip milk futures.