GlobalDairyTrade auction well supported despite botulism scare

Dairy commodity prices eased at the first GlobalDairyTrade (GDT) auction to be held since the news broke of certain Fonterra products being contaminated with Clostridium botulinum toxin.  The 2.4% decrease in the GDT Price Index is not a massive downwards swing in prices indicating the market is not overly concerned about quality issues of the products Fonterra is selling via the auction.  Fonterra does not sell whey products on GDT.  Participating bidder numbers increased at this auction with 199 buyers participating, up from the 178 that were involved in the previous auction held three weeks ago. Prices have recently been tracking at very high levels in historical terms, so it does not come as a surprise that prices have softened a little at the most recent auction.  A whooping 39,000 tonnes of whole milk powder (WMP) was put up for sale by Fonterra last night, so if bodes well that this big volume was cleared at very good prices.  At the auction WMP eased back by 1.6% to an average winning price of US$5021/tonne.  The market for WMP is still extremely tight with limited supplies in-market, and this will have helped prices remain firm. Skim milk powder prices were down by 3% on average across all grades and suppliers.  Fonterra supplied SMP achieved lower prices than at the previous auction, meanwhile prices for product offered by other suppliers did increase.  Fonterra product still achieved a premium over product supplied by Dairy America, Arla, and Amul but the gap has narrowed.   Milkfat products were supported to a lesser extend than milk powders at the latest auction.  Anhydrous milkfat (AMF) offerings were at their seasonal high with 4734 tonnes on offer.  This year Fonterra plans to sell less AMF on GDT than they have done so in previous years.  Despite lower quantities forecast to be sold via GDT the auction was not particularly well supported for this product.  AMF prices d