4 April 2012

2 minute read

Across all product categories, the GDT Price Index increased 1.5 per cent. The average price for the June Cheddar cheese contract is $3,225/ MT, or $1.4125/lb., and the July - September contract closed even higher at $3,945/MT or $1.7894/lb.

The average Anhydrous Milkfat (AMF) price for June through December contracts averaged $3,583/MT, or $1.6252/lb. In particular, the October - December contract closed 15.1 per cent higher than the average at $4,125/MT or $1.8711/lb. Converted to 80 per cent butterfat that is equivalent to $1.50/lb. It is important to note that AMF typically sells at a discount to butter. Recent low-end of the range European and Oceania butter prices, containing 82 per cent butterfat, reported by Dairy Market News are $1.4969/lb. and $1.7463/lb., respectively.

Therefore, US domestic butter prices are competitive in the global market. The average SMP price for the contracts delivered from May through December settled at $3,078/MT, or $1.3962/lb. That is down 0.8 per cent vs. the prior auction. Nevertheless, Fonterra-sourced SMP posted higher prices in each contract period, culminating with $3,335/ MT or $1.5127/lb. for the October - December contract.

Low Heat Regular SMP, supplied by Dairy America, was only offered during the May and June contracts. Both closed unchanged vs. the last auction at $2,765/MT. This is equivalent to a $1.268/lb. at 35.0% protein, compared to a New Zealand SMP price of $3,145/MT, or $1.4266/lb., for the June contract.

The GDT auction results had little impact on the CME spot and futures markets. The CME Cheddar barrel price was bid 0.25¢ higher to $1.4625/lb. while the block market was unchanged at $1.4900/lb. The CME spot butter market settled unchanged at $1.4550/lb.