GDT dips again despite drop in global milk production
© Korta/Adobe Stock Wholesale dairy values fell by 4.6% at the latest fortnightly Global Dairy Trade (GDT) on 18 October.
The GDT price index stood at $3,723 (£3,350), down $188 (£169) on the previous fortnightly auction on 4 October.
Whole milk powder (WMP), which typically accounts for more than half of the total volume sold, dropped by 4.4% to average $3,421 (£2,916/t).
See also: Tentative dairy markets hover around 50p/litre mark
Skimmed milk powder had the biggest reduction in price, falling by 6.9% to average $3,250/t (£2,924/t).
Butter, cheddar, and anhydrous milk fat also all achieved lower prices.
Values fell for the second consecutive time at the event.
AHDB senior analyst Katherine Jack said: “This decline in prices has been mainly driven by reduced demand.
“Although the platform trades products to and from multiple countries, the biggest driver is product going from Oceania to China, particularly WMP.”
Ms Jack said the same trend has not yet been seen in Europe, with both EU and UK wholesale prices remaining at high levels in recent months.
Global milk supplies
Industry forecasts suggest global milk production will drop by 0.5% this year.
Milk supplies in the UK are forecast to decline by 1.1% on the previous year in 2022, while those in the EU are due to drop by 0.5% year on year.
Australia and New Zealand are expected to reduce milk supplies by 4.4% and 3% respectively.
Patty Clayton, lead analyst at the AHDB, said: “Both Australia and New Zealand are projected to perform worse than had been expected in the mid-year forecasts, as is Argentina.
“For these southern hemisphere countries, the reductions are due to a combination of factors, including unfavourable weather conditions, poor grass growth, labour shortages and high input costs.”
Ms Clayton said the general view in industry is for little growth in global milk production during 2022 and 2023.
Freshways price hold
Dairy processor Freshways will continue to pay its suppliers 50p/litre in December for a standard liquid litre of 4% butterfat and 3.3% protein.
The liquid processor does, however, warn that market sentiment is negative and commodity prices are falling, which could affect farmgate milk prices.
Bali Nijjar, managing director at Freshways, said: “We will hold our price for December. However, we are at 50p/litre, and some of our liquid-only competitors are paying 2p/litre less than we are. One is paying 4p/litre less.
“Basically, if our competitors don’t increase to our level, we will be forced to review our leading position in the new year.”