Another GDT reduction, although not as large

Published 20 May 15

The recent Global Dairy Trade (GDT) auction saw another decrease with the price index falling 2.2%. While another blow to price indications, the rate of price decline continues to fall and that could be seen to be an indication that prices are near the bottom of the market. Price stabilisation is often the first sign of price recovery, although the process will take time. This means the next couple of auctions could be crucial in providing an indication of whether we have actually reached the bottom of the market as well as potential future movements of wholesale prices. Wholesale prices are currently expected to be driven by supply and, with New Zealand nearly at the country’s trough period, production during the EU’s spring flush could be important in determining where we go from here.