World Dairy Markets Down 5.1%
World dairy prices took a major hit this week on the Global Dairy Trade auction in New Zealand, down 5.1% in the aggregate on fairly heavy trading. More than 32,000 metric tons of product changed hands, a 25% to 30% jump in normal trade volume.
The drop in prices marks the largest decline since March 2017.
All commodities were lower. Whole milk powder (WMP) took the deepest dive, down 7.5% to $1.36/lb. Cheddar cheese was down 5.3% to $1.62/lb. Skim milk powder (SMP) was down 4.6% to $1.17/lb and butter was off 2.8% to $1.56/lb.
These prices changes make U.S. butter competitive on world markets, and SMP remains so. But block cheese, even with recent price declines on the Chicago Mercantile Exchange, and WMP, remain above world levels. While high U.S. cheese prices are welcome news to dairy farmers, they also could open the door to imports as well, warn dairy analysts.