Price declines continue at the GDT event 394

GDT Event 394 recorded another sharp decline, with the GDT Price Index falling by 4.4%. This outcome did not fully align with the signals previously indicated by SGX futures for both the “all contracts” and the “C2” methodologies. The average winning price closed at $3,341 per ton, representing a decrease of 4.73% compared with Event 393.New Zealand’s offered volume declined by 1.72%, or 583 tons, compared with Event 393. This reduction can largely be attributed to the combined absence of BMP volumes. On a year-to-date basis through October, New Zealand milk production increased by 1.65%, equivalent to an additional 264 million kilo of milk.Results of GDT event 394 PRICE INDEX DOWN -4.4%, AWP $ 3.341 NZ Supply AMF DOWN -5.2%, AWP $5,602 ↓ BUTTER DOWN -2.5%, AWP $ 5,012 ↓ Cheddar UNCH AWP $4,646 ↔ SMP DOWN -2.1%, AWP $ 2,431 ↓ WMP DOWN - 5.7%, AWP $ 3,161 ↓ European and US Supply Butter (Solarec) DOWN -0.76%/ $ 4,798/mt (average price) ↓ Mozzarella UP 6.7% AWP $ 3,395 ↑ Lactose ( Polmlek) UP 14.4%/ AWP US $ 1,430 ↑ SMP W-Europe, Arla, DOWN -2.48%, AWP $ 2,323 (average price) ↓ SMP W-Europe, Solarec, DOWN -0.23%, AWP $ 2,332 (average price) ↓ SMP USA N.A., / AWP N.A.. ↔ WMP W-Europe,Solarec/ UP 4.51% . AWP $ 3,512 (average price) ↑ At Event 394, the GDT Price Index decline was driven by broad-based weakness across most products.Anhydrous milkfat (AMF) prices fell by 5.2%, with the largest loss recorded in Contract 1. The implied butterfat value in AMF stands at $5,630 per ton on a 100% fat basis.Butter prices decreased by 2.5%, with an implied butterfat value of $6,075 per ton on a 100% fat basis. As a result, the butterfat value spread between butter and AMF has widened to $445 per ton in favor of butter.Cheddar prices remained unchanged, despite US Cheddar markets trading near historical lows.Skim milk powder (SMP) declined by 2.1%, with the steepest losses observed in Contract 4 and the smallest decline in Contract 5.Whole milk powder (WMP) recorded a significant drop of 5.7%, with the largest decline in Contract 2 and the smallest in Contract 5A notable price spread continues to be evident between front-month and later-dated contracts for AMF, butter, and WMP. NZ front deferred Last vs front AMF $5.687 $5.831 2,53% BUTTER $4.958 $5.200 4,88% CHEDDAR $4.627 $4.645 0,39% SMP $2.460 $2.500 1,63% WMP $3.110 $3.275 5,31% European and US supplyEuropean pricing signals were mixed, with roughly as many prices declining as increasing. US SMP was not offered in this GDT event. However, on the day following the auction, the CME spot call session saw US SMP settle at $2,703 per ton on an FOB basis.Although SGX futures had initially pointed toward the GDT outcome, the market reaction in the days following the auction was negative, with most quotations losing value. AMF and WMP experienced the most pronounced declines. WMP 03/12/2025 17/12/2025 ∆ ∆% December $3.285 $3.223 -$63 -1,90% January $3.265 $3.130 -$135 -4,13% February $3.265 $3.135 -$130 -3,98% March $3.285 $3.140 -$145 -4,41% April $3.380 $3.220 -$160 -4,73% May $3.400 $3.265 -$135 -3,97% SMP December $2.500 $2.490 -$10 -0,40% January $2.490 $2.470 -$20 -0,80% February $2.500 $2.500 $0 0,00% March $2.530 $2.515 -$15 -0,59% April $2.580 $2.555 -$25 -0,97% May $2.615 $2.585 -$30 -1,15% AMF December $5.850 $5.753 -$98 -1,67% January $5.675 $5.545 -$130 -2,29% February $5.600 $5.470 -$130 -2,32% March $5.500 $5.370 -$130 -2,36% April $5.450 $5.350 -$100 -1,83% May $5.400 $5.285 -$115 -2,13% BUTTER December $5.100 $5.073 -$28 -0,54% January $4.825 $4.870 $45 0,93% February $4.905 $4.875 -$30 -0,61% March $4.900 $4.900 $0 0,00% April $4.900 $4.985 $85 1,73% May $4.890 $4.965 $75 1,53% Average prices C1-C6 03/12/2025 17/12/2025 ∆ ∆% WMP $3.313 $3.185 -$128 -3,86% SMP $2.536 $2.519 -$17 -0,66% AMF $5.579 $5.462 -$117 -2,10% BUTTER $4.920 $4.945 $25 0,50% The negative response to GDT Event 394 on SGX has been persistent but remains broadly in line with developments in current cash and futures markets.With this auction, Fonterra has reached the end of a prolonged period of positive theoretical GDT revenue performance. Up to Event 394, the current season has generated a negative result of 2.41%, equivalent to a revenue shortfall of approximately $46 million, when compared with the average prices achieved during the 2024/25 season.