13 October 2023
GDT is the world’s leading platform for core dairy products and supports efficient dairy derivative trading. Our twice-monthly GDT Events auction service connects buyers and sellers of globally traded dairy products worldwide to trade US$ 2-3 billion and more than 600K MT annually, clearing more than 95% of the total quantity offered. We held our 341st Trading Event on 3 October 2023, when 1,511 MT of US-sourced products were traded – a nine-year high.
Our CEO Eric Hansen said, “In line with our three-year strategic plan, we are seeking new sellers from all global milk pools to provide our bidders with more choice and enable GDT to publish credible reference prices for more products and across more regions. We are actively seeking US sellers of dairy products to build out US export reference prices.”
US-based sellers have a long history of partnering with GDT. To date on GDT Events, they have sold more than 147K MT of dairy products.
DairyAmerica, Inc, established in 1995 by Danish Creamery, Dairymen’s Cooperative Creamery Association, and California Milk Producers, was the first US seller to join GDT. Between 2011 and 2014, they successfully sold large quantities of SMP to a diverse range of buyers, then rejoined the platform in 2019.
Today, DairyAmerica is the world’s largest NFDM/SMP marketing company, selling nearly 500,000 MT per year.
DairyAmerica CEO Patricia Smith said, “For DairyAmerica, our continued commitment on the GDT platform connects us with existing and new direct customers allowing us to expand our global reach with continued emphasis of promoting the quality of US origin dairy ingredients.”
Seattle based co-op Darigold, with more than 100 years of history, is one of the largest dairy producers in the US. Darigold joined GDT in mid-2023. Their CEO, Joe Coote, said their goal is to transform from being a leading domestic dairy producer in the US to a top-tier global producer. “Working with GDT expands our reach into more markets and to more customers and is another step on this journey,” he said.
Valley Milk, LLC produces a full range of premium milk powders at their processing facility in Turlock, CA. Valley Milk also joined GDT in mid-2023. Their CEO, Glenn Wallace said, “Partnering with GDT provides us with an efficient way to expand our direct customer relationships across all major dairy importing countries, whilst having confidence in knowing our product has sold at the market price.”
All three of these US dairy ingredient suppliers have growth goals that extend beyond the country’s borders.
Global growth in the demand for dairy is expected to continue, with the largest increases in Asia and Africa. Milk production growth in the major export regions, however, is slowing. The outlook is for flat or declining milk production in Europe and Oceania, while the US, China and India will continue to grow.
Research by Rabobank points to a 33 million MT gap in fulfilling the projected increase in global dairy demand from imports by 2030.
Milk production in the US generally sees steady growth driven by increasing milk output per cow while the nation’s dairy herd remains relatively stable. US milk production grew 13% over the last decade, and an average growth rate of 1.0 to 1.5% per annum is forecast going forward.
Nearly US $6 billion in new plant investments and expansions will come online over the next two years in the United States, mainly in cheese and whey and ESL/aseptic fluid milk products.
Prices for several products could weaken given new supply hitting the market and the need for US producers to export some of it.
Cheese supply is predicted to increase by 6-7% over 2025-26 as new plants ramp up production. Exports will need to expand – a 10% increase (45K MT) would be another Japan for US cheese.
Whey protein supplies are likely to increase, with potentially 20-25% growth in WPC 80 and whey permeate, with minimal growth in lactose, WPI, WPC 34/35, and sweet whey powder. Most of the growth will go to export markets.
Milk powder and butter growth will likely be limited to the Darigold plant. Darigold is constructing a US$ 600 million production facility to expand butter and powdered milk products and expects to process an additional 8 million pounds of milk per day when the new facility begins operations in 2024.
