Butter was the biggest decliner, dropping by 10% from the previous auction to average US$3,112/t. Butter had been one of the stronger performers relative to other commodities during the first couple of months of 2015 but values have now plunged 32% in just three months.
Anhydrous milk fat (AMF) was the other major fat product to take a tumble, registering a 7.4% decline, as the average sale price dropped to US$3,112/t. This equates to a 27% decline since the start of March and is the lowest AMF returns on GDT since November 2012. AMF returns fell the most for product in the nearest contract period that it was offered in, Contract 2, dropping by 9.0%, while Contract 5 fared the best but still declined by 5.1%.
Milk powder values also continued to slide at the latest auction. The 3.1% drop in whole milk powder (WMP) values was the seventh consecutive decline on GDT, while for skim milk powder (SMP) the 1.3% fall was its sixth.
For WMP this means much of the early-2015 recovery has now been erased, with the average winning price of US$2309/t just US$80/t above the five-year low hit in December last year. For SMP this is the lowest GDT result since August 2009.
Movements in WMP and SMP returns at the latest auction were sporadically spread across the various contract periods. WMP values for all contracts declined but the biggest falls were for product to be delivered in September and October, for which prices declined by over 4%. Movements in SMP returns ranged from a 2.5% decline for product delivered in August to a 1.8% increase for that to be delivered in December.
The average winning price for cheddar actually increased considerably at the latest auction. However, unlike recent previous events, no product was offered in Contract 2 so the results are not comparable.
Of the other product groups on offer, butter milk powder prices fell furthest, dropping 7.0%, while lactose and rennet casein recorded 6.9% and 4.4% declines respectively.
