The fortnightly GDT Price Index is on a downwards path with the latest event showing a 4.3% decline and an index of $3100.

Skimmed milk powder (SMP) was down by 1.4% to $2454, cheddar was down by 1.4% to $3910 and butter declined less by 0.7% to $4680. The key driver of the loss was whole milk powder (WMP) which recorded a substantial decline of 8.0% at $2864.

The major market for WMP is China and demand from China remains lacklustre amid comfortable domestic supplies. China’s total milk production in 2023 is forecast at more than 42m tonnes, which is a 4% increase over 2022 from production efficiency gains and a larger cattle inventory, according to estimates by the USDA. They also estimate an increase in WMP production in China to nearly 1.2m tonnes due to strong growth in domestic milk production, reducing the need for imports.

Global milk production is however expected to flatten off in 2023 across the key producing regions, growing 0.1% year on year, according to the latest figures.

According to a report from AHDB, this is a slight downwards revision from expectations earlier in the year that were sitting at growth of only 0.2%.

The US (0.8%), UK (0.3%) and New Zealand (2.0%) are estimated to register some growth.

Expectations for the US remain reasonably buoyant at 0.8% growth due to higher than expected herd size.