Dairy processors caught between rock and hard place as GDT index falls to lowest since October

Reduced demand from China was blamed last week for falling skim and whole milk powder prices at the New-Zealand-owned GDT Events auction

Over the past year, EU dairy product prices went to record highs, lifting milk prices paid to farmers 40% above five-year averages.

The record high prices in the EU dairy market may be threatened by the recent 10.4% fall in international prices in the New Zealand-owned GDT Events auction.

However, if processors cut prices paid to farmers, they risk depressing already reduced milk deliveries, because high input costs have left farmers’ profit margins very tight, or non-existent.