Cheddar and SMP the exceptions in quiet GDT

Published 21 March 18

This week’s Global Dairy Trade (GDT) event was very quiet, with almost no movement at all from WMP, butter and AMF. Instead the overall result of a 1.2% decrease in price index was driven by declines in cheddar and SMP, down 3.9% and 8.6% respectively. Though there has been some movement between auctions, overall the cheddar price has been relatively stable through February and March.

However, the fall in SMP price is an expected rebalancing after it increased 5.5% at the last event*. Although it has fallen from an average price of US$2,051/tonne at the last event down to $1,887/tonne, this is in line with February prices, which averaged $1,882/tonne.

2018.03.22 GDT

Meanwhile, the lack of movement among some of the key products at this event may be a sign that traders are waiting to see what happens to supply and to the markets. Although New Zealand production is still struggling, global milk supplies continue to rise, lessening NZ’s overall impact on the markets.

 

*GDT reviewed last month’s SMP outcomes and concluded that, although unusual, the winning prices achieved in Trading Event 207 are consistent with GDT processes and were determined by the interactions of demand and supply.