Powders drive increase at latest GDT event

By Kat Jack

The Global Dairy Trade price index rose another 1% to US$4,011 at the latest event (21 September). This is the third consecutive rise after a run of declines that had lasted from 20 April through to 3 August.

Whole milk powder drove the increase at the 21 September event, with the highest increase of the products offered (2.2%), as well as accounting for over half of the product sold. The SMP price index also rose 0.9%. In contrast, butter and cheddar were both down compared to the previous event (by 1.9% and 1.2% respectively).

2021 bucks seasonal volume trends

If we look at the data for total volumes sold at each event, there has been a clear seasonal trend in the last few years. Historically, volumes have been at their lowest in May, then climbed rapidly to a peak around September-November. This roughly follows the New Zealand milk year, which will influence the volume of product available for sale.

In 2021 however, the increase in volumes sold has been very slow since May. As volumes sold generally reflect the volumes on offer for sale, this could be part of what is supporting prices. For comparison, at the equivalent event last year (15 Sep 2020), 33,791 tonnes were sold with an index of $3,092. At this event (21 Sep 2021), 24,476 tonnes of product were sold with a weighted average price index of $4,011. So that was 28% less product sold, and a 30% higher price index.

This difference in product volumes isn’t due to New Zealand production dropping off – currently available data (up to July) shows that the last few months have been up year on year. Instead it appears companies are choosing to offer less on the GDT platform. This could be because supply is going elsewhere, or because sellers are trying to balance supply against anticipated demand. 

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