Apr. 21 saw two bits of fresh news that left no doubt of continued pain for the dairy sector, with Fonterra’s GDT auction results down 4.2 percent followed by USDA’s milk production report showing continued growth in milk production in a market already woefully oversupplied.
Major product categories registered steep losses on the GDT platform: Anhydrous milkfat was down 7 percent, butter down 3.6 percent, whole milk powder down 4 percent, and skim milk powder down 5 percent. The trade-weighted index lost 4.2 percent in value on just over 20,000 MT of traded volume.
That same day, USDA’s monthly U.S. milk production report showed strong growth in U.S. milk volume driven by a combination of herd expansion and the spring flush. Milk production grew 2.4 percent as supply is clearly outpacing demand—farmers have even resorted to dumping excess milk above available processing capacity.