Dairy prices at GDT event 412 ease amid a notable Cheddar surge

Event 412, the eighth GDT event of the 2026/27 milk season, recorded a decrease of 1.1%, a surprisingly weak result compared with prior expectations based on SGX price developments. The Average Winning Price declined to $3,868 per ton, from $3,910 per ton in Event 411.Since the previous GDT event, the market had been providing mixed signals, and Event 412 partly reflected this trend, with butterfat prices declining while skimmed milk powder prices increased. However, the GDT result was weaker than the signals provided by SGX futures. Both the C2 and all-contracts methodologies had indicated strong gains of 2.7% and 3.0%, respectively. New Zealand's volume was nearly unchanged from the previous event at 40,600 tons.Year-to-date through July, New Zealand's milk production increased by 5.43%, adding approximately 490 million kilo compared with the same period last year. Total milk production through July reached 9.521 billion kilo.GDT event 412 results PRICE INDEX DOWN -1,1%, AWP $ 3,868 NZ Supply AMF DOWN -3,0%, AWP $ 5,739 ↓ BUTTER DOWN -5,7%, AWP $ 4,760 ↓ Butter Milk Powder DOWN -0,5%, AWP $ 4,549 ↓ Cheddar UP 16,5%, AWP 4,075 ↑ SMP UP +0,1%, AWP $ 3,689 ↑ WMP DOWN -0,8%, AWP $ 3,565 ↓ European and US Supply Butter (Solarec) UP +4,48%./ $ 4,965 (average price) ↑ AMF (Valley Milk USA) N.A./ N.P. ↔ Mozzarella UP +0,3% AWP $ 4.244 ↑ Lactose UP 2,0%/ AWP US $ 1,910 (Arla + USA) ↑ SMP W-Europe, Arla, UP +8,20%, AWP $ 3768 (average price) ↑ SMP W-Europe, DMK, N.S./ AWP N.S. ↔ SMP W-Europe, Solarec, UP +5,97%, AWP $ 3,843/mt (average price) ↑ SMP USA n.a. / AWP $ 3.773 ↔ WMP W-Europe, Solarec N.A. AWP $ 4.445 (average price) ↑ AMF moved down by 3.0%, with the largest decline in C2. The butterfat value in AMF is $5,768 per ton on a 100% fat basis.Butter decreased by 5.7%. The butterfat value in butter is $5,770 per ton on a 100% fat basis. The difference in butterfat value between butter and AMF is now $32 per ton in favour of butter.Buttermilk powder moved down by 0.5%.Cheddar moved up by 16.5%.SMP moved up by 0.1%, with the largest gain recorded in C4 at 0.8%. SMP continues to be priced above WMP, a relatively rare occurrence that was last seen in 2022.WMP moved down by 0.8%, with the largest decline recorded in C2 at 1.0%.A significant spread was observed between front-month and later-dated Cheddar contracts. NZ front deferred Last vs front AMF 5720 5770 0.87% BUTTER 4751 4860 2.29% BMP 4590 4530 -1.31% CHEDDAR 3940 4155 5.46% SMP 3719 3698 -0.56% WMP 3555 3525 -0.84% European and US supplyAll non-New Zealand prices were either higher or unchanged, excluding products that were not offered at this event. On the day of the GDT auction, the CME spot call session saw US SMP settle at $4,486 per ton, representing a strong result.In the days following the auction, the SGX market delivered a mixed response, broadly mirroring the GDT results, with the six-month averages declining. WMP 02/09/2026 16/09/2026 ∆ ∆% Sept 3580 3535 -45 -1.26% Oct 3730 3600 -130 -3.49% Nov 3790 3675 -115 -3.03% Dec 3840 3740 -100 -2.60% Jan 3915 3845 -70 -1.79% Feb 3960 3940 -20 -0.51% SMP Sept 3665 3670 5 0.14% Oct 3750 3715 5 0.14% Nov 3785 3730 -35 -0.93% Dec 3800 3750 -55 -1.45% Jan 3830 3755 -50 -1.32% Feb 3880 3770 -75 -1.96% AMF Sept 5960 5828 -132 -2.21% Oct 5750 5710 -40 -0.70% Nov 5755 5700 -55 -0.96% Dec 5700 5700 0 0.00% Jan 5650 5725 75 1.33% Feb 5700 5725 25 0.44% BUTTER Sept 4990 4903 -87 -1.74% Oct 4900 4650 -250 -5.10% Nov 4900 4640 -260 -5.31% Dec 4920 4630 -290 -5.89% Jan 4945 4945 0 0.00% Feb 4930 4950 20 0.41% Average prices C1-C6 02/09/26 16/09/26 ∆ ∆% WMP $3,803 $3,723 -$80 -2.10% SMP $3,785 $3,732 -$53 -1.41% AMF $5,753 $5,731 -$21 -0.37% BUTTER $4,931 $4,786 -$145 -2.93% The SGX response reflects the GDT results and is consistent with the current market sentiment. Year-to-date through July, New Zealand milk production is already approximately 490 million kilo ahead of the same period in 2025.With Event 412, Fonterra has continued the new season with a negative theoretical GDT revenue result. Through Event 412, the current season has generated a negative result of 2.24%, equivalent to approximately US$20.3 million below the revenue implied by the average prices of the 2025/26 season.