GDT Index Falls; Butter and Cheddar remains strong

In the 17 June Global Dairy Trade (GDT) auction, the overall GDT Price Index fell 1.0%, settling at USD 4,389/tonne .

• Anhydrous Milkfat: Lost ground with a 1.3% price index decline, averaging USD 7,276/MT (€6,290).

• Butter: Strength continued, with a 1.4% index rise to USD 7,890/MT (€6,821).

• Cheddar Cheese: Notable increase of 5.1%, averaging USD 4,992/MT (€4,316).

• Lactose: Witnessed a 3.6% drop, with an average price of USD 1,323/MT (€1,144).

• Mozzarella: Slight correction of 1.9%, bringing the price to USD 4,802/MT (€4,151).

• Skim Milk Powder: Declined 1.3%, priced at USD 2,775/MT (€2,399).

• Whole Milk Powder: Fell 2.1%, with an average cost of USD 4,084/MT (€3,531).

In a highly active June 3 trading event, Global Dairy Trade (GDT) witnessed participation from 172 registered bidders, with 110 emerging as winning bidders across 20 competitive bidding rounds .  Sellers offered between 14,701 MT and 19,108 MT of dairy products, with 15,209 MT successfully sold, reflecting strong demand and effective price discovery .

This volume underscores GDT’s role as the leading platform for global dairy price transparency. Amid fluctuating product prices—including notable gains in butter and cheddar, and declines in powders—trading volumes remained resilient, demonstrating the market’s responsiveness to both supply availability and shifting demand sentiment. The participation depth and total volume sold signal that dairy buyers and sellers continue to rely on GDT’s twice‑monthly auction cadence to guide strategic procurement and hedging decisions.

Rabobank’s Q2 Global Dairy Quarterly, titled “Too Good to Be True?”, warns that the current price strength may not last. Production across the major exporter bloc expanded only modestly in Q1 (+0.5%), but is expected to accelerate to 1.1% in Q2 and 1.4% in Q3—the fastest quarterly growth since early 2021 . Despite this, Rabobank projects a gradual correction in the second half of 2025, citing multiple demand-side vulnerabilities: record-low US consumer confidence, weak Chinese consumption, sluggish foodservice spending, and ongoing trade tensions .

Industry analysts interpret these developments as a pivot point. The GDT dip reflects early signs of supply outpacing demand, while Rabobank expects a soft landing—not a crash—as markets rebalance after record-high pricing in early 2025 .

Key implications for dairy stakeholders include:

• Strategic diversification: Explore stability through value-added products or alternate export markets.

• Component optimization: Focus on milk fat/protein yields to sustain margins.

• Hedging fundamentals: Employ forward contracts and futures to lock in prices amid volatility.

• Demand expansion: Target emerging markets—Southeast Asia, Middle East—to buffer demand risks in China and Western economies.

Industry Insight:
The GDT index's decline signals that the strong early-2025 market may be peaking. With global milk supply rising and demand uncertain, dairies must shift from growth focus to margin resilience, risk management, and product innovation to weather the expected H2 recalibration.

Source : Dairynews7x7 June 17th 2025 GDT results And Rabobank Quarterly report