Fonterra Auction

Published 17 February 15

As the Fonterra Global Dairy Trade (GDT) auction is now held twice a month with varying intervals, this page has been changed to emphasise the price changes between auctions for different products. For further information on individual product details, please visit the Fonterra site by clicking here.

Auction summary for 17 February 2015:

The most recent auction showed a 10.1% increase in the overall auction index. All products traded showed an increase in average price compared to the previous auction.

  • The average price for all products across all contracts now stands at US$3,366/tonne.
  • The gDT TWI* increased by 10.1% compared to the previous auction.
  • WMP averaged $3,272/tonne across all contracts, an increase of 13.7% on the last auction.
  • The weighted SMP price was up 5.7% from the previous auction, at $2,744/tonne. The average price for UK SMP was $2,610.
  • The average weighted butter price was up 1.1% from the last auction, at $3,823/tonne.
  • The price for Cheddar was up 16.8% on the last auction, at $3,054/tonne.
  • The AMF (Anhydrous Milk Fat) price increased by 6.4% from the previous auction, to an average of $4,314/tonne.
  • The BMP (Butter Milk Powder) price increased by 1.9% to $2,674/tonne.
  • Prices for Casein averaged $8,897/tonne, up 1.2% from the previous auction.
  • No Whey Powder was traded.

The next auction is due to take place on Tuesday 3 March 2015.



Changes in Price Indices Contract 1 Contract 2 Contract 3 Contract 4 Contract 5 Contract 6 All Contracts
Mar-15 Apr-15 May-15 Jun-15 Jul-15 Aug-15
Anhydrous Milk Fat (AMF) n.a. 6.3% 6.4% 6.5% 7.0% 5.5% 6.4%
Butter n.a. -1.6% 1.2% 5.4% 5.2% n.a. 1.1%
Butter Milk Powder (BMP) n.a. 2.9% -0.6% n.a. n.a. n.a. 1.9%
Cheddar (Ched) n.a. 16.3% 16.0% -18.0% n.a. n.a. 16.8%
Rennet Casein (RenCas) n.a. 0.1% 1.1% 2.8% n.a. n.a. 1.2%
Skim Milk Powder (SMP) n.a. 6.0% 5.5% 5.0% 6.9% 6.0% 5.7%
Whole Milk Powder (WMP) n.a 13.0% 13.9% 12,1% 15.3% 18.0% 13.7%
All   Products (Trade-Weighted) n.a 9.2% 10.0% 9.8% 12.4% 14.8% 10.1%

 Source: GlobalDairyTrade platform

Data marked with an “*” indicates that the reported change is computed relative to two trading events prior to the current event because no quantity was offered or sold in the preceding event. "n.a." indicates no quantity was offered or sold in either the current event and/or in the prior two events.

 Fonterra auction

Notes to the auction

*gDT-TWI™ and All Products (WMP,AFM,SMP) TWI are chain-linked, trade-weighted Fisher indices using total international trade flows which represent the movement in auction prices between auction events. The indices use globalDairyTrade prices where available and USDA Dairy Market News prices elsewhere. USDA Western Europe average price for Butter Oil is used for AMF prior to December 2009, USDA Oceania average price for SMP is used prior to April 2010, and USDA Oceania average price for WMP is used prior to August 2008.

The Fonterra auction takes place bi-weekly on an online trading platform called GlobalDairyTrade. It started on 3 July 2008. Fonterra accounts for more than a third of international dairy trade. Although Fonterra will only sell up to 20% of its commodities through this platform, sales results from GlobalDairyTrade provide a global benchmark for commodity prices.

Six contracts are made available, corresponding to future delivery periods. For example, 'contract period 1' provides for products where the shipment period is the first month after the month of the Trading Even and 'contract period 6' means that shipment begins six months after the trading event.

The use of six contract periods has been in effect since April 2012.

The auction always follows the same pattern. Five days before the start of the event, volumes available and starting prices are made public. During the trading, in each successive bidding round, the price is raised. Given the announced prices, bidders enter the volume they wish to purchase. This continues until the available volume is cleared, each customer staying in as long as they enter volume bids.