GDT, conflict & rising prices - Stu Davison

0:00This is a podcast from Rover. All right, we are talking GDT as a GDT Wednesday, our jet-setting correspondent from High Ground Dairy, Stu Davison, is currently in an Uber, I think, somewhere in Melbourne, actually. Lovely to talk to you again, my friend, how are you? Yeah, good, man. Thanks for being back on. Yeah, GDT said there's definitely the name of the game at the moment. And yeah, just left Melbourne airport on Earth into the city. So she's all good, it's been a big busy GDT day and one event. Yeah, so did you manage, obviously, you have managed to sort of catch up with it in between flights and bits and pieces. A very modest increase of 0.1%, so basically a flat line at this time round. Yeah, basically a flat. If it wasn't for skimook pattern, an AMF delivering pretty strong results. It would have been a decline, it would have been a red marker. But, you know, those two products managed to push us back into positive and quite notable Hummel pattern down, quite dramatically there too. So a very much softer result than the market was expecting.

1:01Yeah, the Hummel pattern down 4%, which, you know, again, we look at that and it's one of the important commodities, isn't it? Yeah, exactly right. One of the big cornerstones and really drives the overall GDT index too. And we still buy us from China. They were there about on Hummel pattern, they weren't too bad. They were actually basically absent for skimook pattern, which is surprising considering the lift and prices. But a big telltale from the situation in China, they're basically backed away from by and across the board for this auction. So quite an interesting result from China. And a really impressive result from the Middle East, Southeast Asia, and Latin America on both skim and AMF. So sort of those cornerstone, you know, shaft stable commodities. AMF, for example, easier to transport than butter in the situation we're thinking creams. And likewise for skimook pattern, that's a little bit longer on the shaft. So those Middle East and buyers are, you know, certainly moving things and keeping the supply lines in check at the moment.

2:01Well, okay, so there's the bigger issue with the days and it's pretty hard to get away from it. The Middle East, what's happening there since we spoke two weeks ago. Yeah, hasn't been much change in situation in regards to this thing winding up anytime soon. So what are we seeing? What are we likely to see? Yeah, for what we know, it could have finished yesterday or it could have been kept going. I don't know where we're getting out of it through some administration at the moment. That's pretty fun. But I think the big change is definitely, you know, the market's had time to digest it and we're seeing the result of that in prices. Really clear to see that, you know, in terms of shipping logistics and the problems, but also the costs that have been imposed there. That sort of, you know, especially when we look at the Chinese back in a way, it's definitely put the sort of kaybosh on their demand for them for now. But the other part of that too is the US dollar. So the big result of the conflict has been a really strengthening US dollar. Obviously with oil prices going through the roof, everyone needs more US dollars to buy more expensive oil. And so currency traders get in front of that and currency gets more US dollars,

3:04especially gets more expensive. So that's also a big headwind for buyers in the market too. So those things combined, definitely soften the market. And we'll see in that normal pattern today. Yeah, it's such a fascinating situation because this is the most unpopular thing that this administration could have done. It's incredible, isn't it? And keep saying it with midterms coming up this year. It's an extraordinary scenario for the current regime to be to be in. Yeah, exactly. Who would have, again, he's really stunned us. He's as big a bit on the word geopolitical situation so far this year. And you know, we're with the, you know, the wildness we thought 25 was that 26 would be this this erratic already. So yeah, it's unpopular home and it's unpopular around the world. And you know, the geopolitical tension in the market is, you know, you'd be short to ignore it at the moment. And it's, you know, it's going to take a long time resolved. And we see that with markets coming to our prices and uncertainty and, you know, be it oil, oil gets all the attention, but it's everything else too.

4:06So inflation's done. We talked about, we saw the RBA. I think this week or last week left there. Bank reserve prices. So, you know, market is reacting to what's going on. It's not an ideal situation. It's going to make, make our friend Mr Trump a little bit more unpopular, unfortunately. So it's not voting well for him. No, exactly. And like I've been talking to people over here, a story about what's been going on in terms of, you know, just the, I mean, you say fuel gets the headlines. And for a very good reason, I suppose as well, because it's so bloody fundamental to everything that we do. So, you know, people are facing costs that are just astronomical in terms of price rises due to that supply chain of the fuel and just the, the according, you know, rise in it. It's going to become untenable for a lot of people. Yeah, really is. And that's, you know, going right back to the EU markets too. That's the, that's a real key fundamental of the fear of the market too. Like, you know, prices won't, you know, have an upside limit now too, because consumers,

5:09if they, you know, they spend any more of their pocket on the fuel bill, then they tend to spend a little bit less on yogurt and the rest. So, yeah, it's a, it's a, it's a problem for markets overall. It's a problem for consumers in the near now. And it's, it's not a fun situation for, you know, governments or anyone to really sort of wade through, you know, it definitely makes you appreciate how settled the world was in the very short memory. I go and, and you think we're sort of let from across this to crosses with, with COVID to this. You know, and the rush you've grown crosses in the middle too. So, it's definitely been a very volatile, you know, six years in the 2020s. So, it's, it's, unfortunately, doesn't look like it's going to slow down anytime soon either. So, exactly, and that just means as well that events are being called off. I just had a look at the formula one website just before. I see Bahrain and Saudi Arabia called off and, I don't know, you probably know, but more about that sort of stuff. But, yeah, that's not great either. No, no, it wasn't really a surprise, you know, considering they're in April.

6:13I know that far away. And, you know, there was an impactation in the first couple of days of the conflict, kind of cooled down by then. But, obviously, it's, you know, been prolonged. And, yeah, probably fair enough for me, fun. But, it's, it's probably indicative of the wider situation. That's probably the headlines for sporting. But, imagine, you know, that's just the tip of the iceberg. But, the downside is I get two less F1 races soon. And, three on the first start of the calendar is not enough to get the edge scratched. No, exactly. What are we coming up? Is it Japan coming up this week, isn't it? Yeah, there's a little bit coming up next. Next, next, not this weekend, the weekend after, isn't it? Yeah. Yeah, exactly right. Exactly right. So, but the Zook is quite a track. And, after such two really good Grand Prix, Cromperies in a row, it's pretty exciting to look for it to the Zooker. And, boy, Liam, Harmon P7, and both the sprint and the GP. That's incredible result. He's basically the fastest Red Bull driver from the stable. Yeah, good. I love that. And, Ship Mercedes have done something over the break, haven't they? Yeah, I tell you what, I'm not a big fan of George Russell,

7:14but I'm a huge fan of Camille Nelly. So, great to see him on a GP and be square in the fight for a championship run anyway. So, you know, rather than anyone else one than George Russell, he just rubs you the wrong way. So, that's good to see you. If anyone's going to be Camille, at least he's a nice young fella. I have an open mind, Stu, because he's the thing I didn't like. He used to like Max Vista, but he used to rub me out the wrong way as well. And now I think he's bloody marvellous, you know, so just, you know, open your mind up a little bit, Stu. I appreciate the challenge mate, but he's still a dog. Fantastic. Well, listen, thank you for giving us your time, as always, in the Uber this time. And look, you're in this part of the world now, so hopefully we'll catch up at some stage. But, yeah, safe travels. My friend will talk to you soon. Sounds good mate. Appreciate it, and always great to chat.