There was a drop in international dairy prices at the latest Global Dairy Trade (GDT) auction today (Tuesday, March 21).
The average price fell slightly to $3,361/MT while the GDT index dropped by 2.6% on the previous auction results bringing the index to 1,012 – compared to 1,039 earlier this month.
The GDT event, which connects sellers from around the world with bidders from more than 70 countries, is owned by the Fonterra Cooperative Group, European Energy Exchange and New Zealand’s Exchange.
The latest event, 328, attracted 148 bidders and saw a total of 26,795 MT of products, including anhydrous milk fat, butter and whole milk power.
The latest auction saw another drop across the board in the price of dairy products, particularly cheddar which slumped by 10.2% to $4,052 – compared to $4,509/MT earlier this month.
But the average price of anhydrous milk fat also fell back by 3.8% to $5,150, while butter dropped by 3% to $4,748.
Meanwhile, skim milk powder also declined by 3.5% to $2,648, and whole milk powder fell back by 1.5% to an average price of $3,228.
The results of the latest GDT event highlight a gloomy trend where dairy commodity prices have been on a downward direction since the beginning of the year.
Demand has flattened which in turn has taken the heat out of the record prices that characterised the market in 2022.
According to the Food and Agriculture Organisation’s latest Dairy Price Index, prices across all dairy products fell in February with the largest falls noted in butter and skim milk powder.
Meanwhile in Ireland, Tirlán, Kerry Group, Lakeland Dairies and Dairygold have all blamed weaker dairy market conditions and increased global milk supplies for their decision to reduce milk prices for February supplies.
Tirlán chairman John Murphy said today that its “farmgate milk price unfortunately needs to move lower this month to reflect the significant correction in market returns that occurred between September and January”.
Tirlán today confirmed it will pay a total of 49.08c/L (including VAT) for February creamery milk supplies at 3.6% butterfat and 3.3% protein.
Farm organisations, like the Irish Farmers’ Association (IFA) and the Irish Creamery Milk Suppliers’ Association (ICMSA) have warned that any further milk-price cuts would be “unsustainable” for farmers – particularly as input costs, especially fertiliser prices, have not fallen significantly.