Second consecutive fall reported at the latest GDT auction

The overall price index at the latest Global Dairy Trade (GDT) auction in New Zealand has recorded its second consecutive decrease in the month of October.

The price index fell by 1% from the previous event earlier this month; on Tuesday, October 3, a decrease of 2.4% was witnessed – the biggest decrease reported since March of this year.

These decreases follow on from consecutive increases of 0.9% and 0.3% at the two GDT auctions during the month of September.

Lasting for over two hours, today’s event had a total of 137 winning bidders across 16 bidding rounds.

Key Results:
  • AMF index up 5.2%, average price US$6,841/MT;
  • Butter index down 2.5%, average price US$5,736/MT;
  • BMP not offered;
  • Ched index down 0.1%, average price US$4,107/MT;
  • LAC index not available, average price not available;
  • RenCas index down 8.6%, average price US$5,612/MT;
  • SMP index down 5.6%, average price US$1,797/MT;
  • WMP index down 0.5%, average price US$3,014/MT.

A decrease of 2.5% was recorded in the butter index, while no butter milk powder (BMP) was offered at the auction. The cheddar index dropped by the smallest of margins, reporting a 0.1% difference compared to its index at the event earlier this month.

Both skimmed milk powder (SMP) and whole milk powder (WMP) were subject to decreases, they suffered falls of 5.6% and 0.5% respectively.

Image source: GDT

Ornua’s PPI and Irish milk prices

Recently Ornua’s Purchase Price Index (PPI) recorded its highest monthly increase this year, bringing the index to a three-year high in the process.

Jumping by 3.3 percentage points, the PPI equated to 114.3% for the ninth month of this year. This announcement by Ornua represents the fifth consecutive monthly increase recorded in 2017.

Some farm organisations believed this rise justified calls for the September milk price offered by processors to be increased.

Glanbia Ireland was the first processor to reveal its milk price for September supplies. It decided to hold it at 35c/L including VAT for manufacturing milk supplies at 3.6% butterfat and 3.3% protein – the same as the previous month.

The decision by the processor to hold its September milk price brought to an end four consecutive months of announcing 1c/L increases.

Meanwhile, Lakeland Dairies decided to increase its milk price for September milk. Compared to August it will pay a 1c/L butter bonus for all milk supplied, including all fixed-price contracts. This takes the Lakeland payment to a gross 36.5c/L including VAT – a 1.22c/L increase in total.