Large supply pressures Global Dairy Trade down again

The first Global Dairy Trade (GDT) of October was again an auction with a predominantly negative sentiment. With an average decline of -1.6%, the auction was also twice as strong in the negative compared to the previous auction. In particular, the price of mozzarella dropped significantly. There was a small increase for butter oil. A substantial volume was auctioned again. In total, over 42,000 tons of product, which is a provisional record for this season. For the main products at the auction, whole and skim milk powder, new price declines were recorded. Whole milk powder recorded a decrease of 2.3%, while skim milk powder saw a modest dip of 0.5%. Notably, skim milk powder is the cheapest in Europe, while whole powder in Europe is still several hundred euros per ton more expensive than in New Zealand. The common explanation so far has been that milk fat in Europe was more expensive than in New Zealand, hence the higher price for whole powder. However, this explanation no longer holds, as butter in Europe is now several hundred euros per ton cheaper than in New Zealand - according to the GDT, about €420 for close to it, and roughly up to €300 per ton for a bit further away.The average butter price fell by 3%. The price of butter oil/AMF, on the other hand, rose slightly. Most spectacular moves were this time again reserved for the cheeses. Just like in the previous auction, the cheddar price increased slightly, but that was nog the big deal. The mozzarella price fell further down, wit almost 12%, reaching the lowest point in about 2 years.