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Global Dairy Trade index drops
After six-consecutive increases, the overall price index declined 8.8 percent on the Global Dairy Trade auction Tuesday morning. There were significant declines on seven products, no lactose and sweet whey powder was offered.
At Tuesday’s sale: the skim milk powder price was 5.5 percent below the March 3rd sale, cheddar cheese declined 7.4 percent, anhydrous milk fat was 8.4 percent lower, butter declined 9.4 percent, whole milk powder lost 9.6 percent, butter milk powder fell 11.6 percent and rennet casein dropped 15.2 percent.
The 85-point drop in the index from the March 3rd sale is the largest decline since last July. The decline not totally unexpected as Fonterra announced earlier in the month the drought in New Zealand was not hurting production as much as thought. The cooperative then reversed a January decision to stop offering product on the GDT. A total of 20,258 metric tons were sold on Tuesday, 1,836 less than the previous sale and the lowest volume at the auction since June of 2011.
Nine major dairy processors from the U.S., Europe, India, Australia and New Zealand use the auction to sell excess product. The GDT is seen as the price discovery mechanism for global dairy prices.
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