August 2, 2022, trading marked the second straight trading session that dairy product prices dropped 5% at New Zealand’s Global Dairy Trade (GDT). That downturn caused the eight-product bundled index to drop from 1,223 to 1,163. On a dollar and cents basis, the GDT Index fell from $4,166 to $3,913 per metric ton . . . a loss of $243 per metric ton. That’s a difference of 11.5 cents per pound.

Based in New Zealand, the GDT auction takes place every other week and does have an impact on global dairy product prices, as the island nation is the world’s largest dairy product exporter. Stateside, nonfat dry milk was the product with the most impact after the GDT auction. In fact, spot prices for the product slipped to a new low for 2022 during Tuesday’s trading on the CME.

When looking at individual products at the GDT, buttermilk powder dropped 9.2% to reach $3,724 per metric ton or $1.69 per pound. Whole milk powder fell 6.1% and sold for $3,544 per ton or $1.61 per pound. Skim milk powder wasn’t far behind, dropping by 5.3% to reach $3,524 or $1.71 per pound.

Overall, Cheddar cheese held nearly steady by slipping a mere 0.7% to settle at $4,797 per metric ton for a price of $2.18 per pound. As a point of reference, Cheddar blocks traded at $1.85 and Cheddar blocks sold for $1.79 per pound at the CME on Wednesday, August, 3.

While butter sold at the GDT fell by 6.1% to settle at $5,194 per metric ton or $2.30 on a per pound basis, U.S. butter moved to a new high for this year. At the close of CME trading on August 3, spot butter netted $3.06 per pound.

As shared in the July 21, 2022, Hoard’s Dairyman Intel, “Price drops for eighth time in nine sessions,” GDT prices can indicate the future direction of U.S. milk prices.

An additional factor at play is China’s reduced buying. As the world’s largest dairy product importer, the GDT auction can be greatly impacted by China’s activity. Read “China’s reduced buying has sent prices lower” to learn more about that situation.

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(c) Hoard's Dairyman Intel 2022
August 4, 2022
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