GlobalDairyTrade: Dairy Price Decline Slows in Q4

19 Dec 2014 --- GlobalDairyTrade (GDT), the world’s leading online dairy auction platform, has a new report to provide insights into global dairy commodity prices.

The GDT Quarterly, launched today, shows that overall dairy prices fell in Q4, 2014 (October to December) at a slower rate than in Q3, 2014. The GDT Price Index declined by 1% in Q4 2014 compared to a decline of 22% in the previous quarter (July to Sept 2014).

GDT Director Paul Grave said GDT has a critical role to play as it provides a transparent window to observe the market dynamics between buyers and sellers of commodity dairy products.

“As milk production continues to grow in Europe next year, we anticipate that dairy companies will see GDT as an attractive online sales channel that compliments their existing traditional sales methods and discovers prices through a competitive global marketplace,” he said.

The GDT market is heavily influenced by the two highest volume product groups, Whole Milk Powder (WMP) and Skim Milk Powder (SMP) which together amount to approximately three quarters of the total volume sold. In Q4 2014 WMP weighted average prices decreased by 7% and SMP decreased by 8.5%.

However over the same quarter, fat-based products Anhydrous Milk Fat (AMF), Butter and Cheddar showed a marked difference with average AMF prices increasing by 35%, butter increasing by 25%, and cheddar decreasing by 1%.

During Q4 2014 the highest volume sold at an auction was just over 55,000MT on October 1. This was an increase of 22% compared to the same October auction in 2013. The total amount sold during Q4 2014 was 5% lower than the previous quarter, totalling 265,000MT of product with a value of US$689 million.

Participation from more than 650 registered bidders remained strong throughout Q4, 2014, with 171 bidders, on average, participating in each auction. This represented a drop of 6% in participation compared to the previous quarter.

Developments on GDT in this quarter include:
• Molkerei Ammerland, from Germany, began offering Sweet Whey Powder in October
• Fonterra has since announced the introduction of Australian Skim Milk Powder in January 2015, further deepening the liquidity in this popular product group