GDT event 395: Prices recover sharply after prolonged decline

GDT Event 395 recorded a strong increase of 6.3%, marking a clear reversal after nine consecutive events of declines. The outcome exceeded the indications from SGX futures, where the “C2” method pointed to a 3.6% increase and the “All Contracts” method suggested a 4% rise. The average winning price closed at $3,533 per ton, representing a 5.77% increase compared with Event 394.New Zealand’s offered volume declined by 18.95%, equivalent to a reduction of 6,297 tons compared with Event 394. This decrease can be attributed to the presence of butter milk powder (BMP) in the offering mix, alongside lower offered volumes across all other commodities.On a year-to-date basis through November, New Zealand milk production increased by 1.76%, adding approximately 333 million kilo of milk.GDT Event 395 results: PRICE INDEX UP +6.3%, AWP $ 3.533 NZ Supply AMF UP +7.4%, AWP $6,011 ↑ BUTTER UP +3.8%, AWP $ 5,206 ↑ Cheddar UP 0.6%, AWP 4,665 ↑ SMP UP +5.4%, AWP $ 2,564 ↑ WMP UP + 7.23%, AWP $ 3,407 ↑ European and US Supply Butter (Solarec) UP 0.94%/ $ 4,843/mt (average price) ↑ Mozzarella UP 0.99% AWP $ 3,418 ↑ Lactose N.A./ AWP US $ 1,413 ↔ SMP W-Europe, Arla, UP 3.84%, AWP $ 2,412 (average price) ↑ SMP W-Europe, Solarec, UP 4.36%, AWP $ 2,433 (average price) ↑ SMP USA N.A., / AWP N.A.. ↔ WMP W-Europe,Solarec/ UP 0.81% . AWP $ 3,540 (average price) ↑ Despite the overall strength reported for Event 395, the GDT Price Index declined by 4.4%, with the average winning price reaching $3,341 per ton.Anhydrous milkfat (AMF) prices fell by 5.2%, with the largest decline observed in the C1 contract. The butterfat value of AMF stood at $5,630 per ton on a 100% fat basis.Butter prices declined by 2.5%, with a butterfat value of $6,075 per ton on a 100% fat basis. As a result, the butterfat value spread between butter and AMF widened to $445 per ton in favour of butter.Cheddar prices remained unchanged, occurring at a time when US Cheddar prices have moved to historically low levels.Skim milk powder (SMP) prices declined by 2.1%, with the largest losses recorded in C4 and the smallest in C5.Whole milk powder (WMP) prices fell by 5.7%, with the steepest decline in C2 and the smallest in C5.A notable price spread was observed between front-month and later-dated contracts for AMF, butter, and WMP. NZ Front Deferred Last vs front AMF $6.070 $5.830 -3,95% BUTTER $5.291 $5.310 0,36% CHEDDAR $4.669 $4.681 0,26% SMP $2.620 $2.630 0,38% WMP $3.345 $3.415 2,09% European and US supplyEuropean prices showed a mixed picture, with as many products declining as increasing. US SMP was not offered during this event. 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 reacted negatively in the days following the auction, with most quotations losing value. The steepest declines were seen in AMF and WMP. WMP 17/12/2025 07/01/2026 ∆ ∆% January $3.130 $3.380 $250 7,99% February $3.135 $3.415 $280 8,93% March $3.140 $3.425 $285 9,08% April $3.220 $3.470 $250 7,76% May $3.265 $3.500 $235 7,20% June $3.255 $3.485 $230 7,07% SMP January $2.470 $2.595 $125 5,06% February $2.500 $2.660 $160 6,40% March $2.515 $2.675 $160 6,36% April $2.555 $2.715 $160 6,26% May $2.585 $2.710 $125 4,84% June $2.605 $2.735 $130 4,99% AMF January $5.545 $5.680 $135 2,43% February $5.470 $5.755 $285 5,21% March $5.370 $5.805 $435 8,10% April $5.350 $5.790 $440 8,22% May $5.285 $5.780 $495 9,37% June $5.330 $5.770 $440 8,26% BUTTER January $4.870 $5.010 $140 2,87% February $4.875 $5.285 $410 8,41% March $4.900 $5.225 $325 6,63% April $4.985 $5.210 $225 4,51% May $4.965 $5.170 $205 4,13% June $4.835 $5.090 $255 5,27% Average prices C1-C6 17/12/2025 WMP $3.191 SMP $2.538 AMF $5.392 BUTTER $4.905 The negative response to the GDT event on SGX has been persistent, though broadly in line with prevailing cash and futures market conditions.With Event 394, Fonterra concluded a prolonged period of positive theoretical GDT revenue outcomes. Cumulatively, the current season up to Event 394 has generated a negative result of 2.41%, equivalent to approximately $46 million, compared with the average prices achieved during the 2024/25 season.