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Global Dairy Trade index hits all-time low
Another drop at the Global Dairy Trade auction. The overall index fell another 10.7 percent Wednesday morning, the ninth-consecutive decline and the largest decline since the 10.8 percent plunge on April 1st. The overall Index now stands at 566, the lowest it has ever been in the ten-year history of the exchange.
Wednesday’s auction saw butter milk powder decline 4.4 percent from the last sale. Rennet casein was 8 percent lower, butter was down 9.5 percent, skim milk powder lost 10.1 percent, anhydrous milkfat fell 10.6 percent, whole milk powder lost 13.1 percent and cheddar cheese plunged 13.9 percent. Only lactose was higher up 1.9 percent from the July 1st sale. Volume was 31,691 metric tons, down slightly from the last auction.
Conducted the first and third Wednesdays of the month, the Global Dairy Trade auction offers dairy products from processors in the U.S., Europe, India, Australia and New Zealand and is a price discovery mechanism for global dairy prices.
Read the full GDT report here:
The plunge took the New Zealand dollar, the “Kiwi” down with it. The New Zealand Herald says the Kiwi was trading at 66.7 cents against the U.S. dollar before the auction, slipped to 66.34 cents immediately after the auction and closed at 66 cents for the day. The bigger-than-expected drop in the GDT index indicates there are more surplus dairy products than thought on the market. The Reserve Bank of New Zealand cut its cash rate by 25 basis points on June 11th and at least two more reductions are expected before the end of the year in hopes a cheaper Kiwi will help New Zealand sell more dairy products on the global market.
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