GDT Auction of 5 Mar 2019: + 3.3%, Whole Milk Powder and Butterfats Are Mainstays The auction results of the Global Dairy Trade (GDT) remain on average on an upward course. The positive trend has been keeping pace since the beginning. Dec. 2018. The results affect the international milk market. Declining milk deliveries in leading countries around the world lead to a relative shortage of dairy products. Drought-related food shortages in Australia, New Zealand and Europe are the root causes of this development. In the USA, too, the multi-year production upswing has slowed. However, there are differences in the individual dairy products. The surcharges for whole milk powder (VMP) fall with +6% to the Vorauktion clearly out of the frame. The results for the individual delivery months until Aug. 2019 remain well above average for all delivery months. The background is the seasonal decline in dairy production in New Zealand as the world's largest exporter of VMP.In contrast, price developments for skimmed milk powder (MMP) fell significantly by -4.3% . This fully compensates for the price increase of the last auction. Despite clearance of the EU intervention stores, MMP is sufficiently available in the market. A seasonal slowdown in the southern hemisphere is more than offset by the upcoming seasonal increases in the EU and US. The two butterfats have risen sharply this time and tie up with + 3.9% and + 3.7%, respectively, to previous auction results. Obviously there was pent-up demand for the weak pre-auction. The prices are heading straight to the middle level of peak price development in recent years. The high premiums in the months of May to July 2019 are noteworthy. Dairy prices are caught in the tug of war between a seasonally sharp decline in dairy production in New Zealand and Australia and the imminent growth in deliveries in Europe and the USA .Depending on the focus of milk processing and the respective supply situation in the most important export areas, there will be more or less severe supply bottlenecks. In the case of MMPs , the US and EU are major exporting countries with a world market share of more than 60%. Butter is scarce in the US and only the EU is considered a significant exporter.
