The latest Global Dairy Trade (GDT) Index report showed significant gains across most dairy commodities, with the exception of cheddar cheese. Matt Tranel, broker analyst with Ever.Ag, shared insights on the implications for the U.S. dairy market, especially in light of tight domestic production.
“China played a more significant role in the recent GDT event. This contributed to the increase in prices for whole milk powder, skim milk powder, and butter,” Tranel explained. “Whole milk powder was up 6.8%, skim milk powder up 3.8%, and butter saw a 3.3% increase. Cheddar cheese, however, remained unchanged.”
Tranel noted that the Oceania region, a major dairy exporter, is well-positioned to meet global demand. This contrasts with the U.S., where tight milk production has forced a focus on the domestic market. “Oceania’s pricing remains fairly supportive of U.S. cheese prices for now. But with U.S. products being tighter, we’re not likely to be major players in the export market soon,” he said.
Looking ahead, Tranel emphasized the need to closely monitor demand and milk production trends. “Demand hasn’t been great lately; even when products are on sale, they’re not moving as quickly as expected,” he noted. “We’re focusing on the first half of 2025, where new cheese capacity in Kansas and elsewhere might shift the market dynamics.”
While Tranel remains neutral to slightly optimistic about the next six weeks, he advises dairy farmers and market participants to stay alert for changes that could impact the market, particularly as new production capacities come online in 2025.
