Global Dairy Prices Jump 4.9%
Two consecutive jumps in dairy prices on New Zealand’s Global Dairy Trade (GDT) auction likely doesn’t signal an unstoppable trend, but it’s good news nonetheless. For the most part, prices had been declining since last summer.
Today’s auction saw aggregate dairy prices climb 4.9%, with none of the six commodities traded showing a decline. Butter soared 8.8% to $2.21/lb. Cheddar cheese was up 5.2% to $1.58. Skim milk powder jumped 6.5% to 82¢/lb and whole milk powder was up 5.1% to $1.37/lb.
U.S. prices are still trading below these levels at the Chicago Mercantile Exchange, indicating U.S. products are still competitive on world markets. For example, butter is trading at $2.16/lb in Chicago, barrel cheese is at $1.22/lb and skim milk powder is at 67¢/lb. USDA’s Dairy Market News reports U.S. whole milk prices in the $1.35 to $1.45 range, which is at or above world prices.
Volume on the GDT auction today was light, with just 23,319 metric tons changing hands. This tonnage is in the lower ranges of volumes that normally are bought and sold, but it’s unclear whether this lighter volume had anything to do with the price surge.