UK wholesale prices
Updated 26 June 2020
Indicative average prices for UK dairy wholesale markets, including bulk cream, butter, skimmed milk powder (SMP) and mild Cheddar cheese.
Wholesale prices generally went up in June. Demand from the retail sector remained strong, while the gradual easing of restrictions in Europe and the UK has lent some support to the foodservice sector. On supply side, things have tightened as milk comes down from the peak, potentially emphasised by the dry weather. Currency fluctuations, with an overall fall in the value of the pound against the euro in June, added some movement to prices.
The month started with an uplift in prices for fat, as demand remained good and volumes came down from the peak. After the initial rise, prices stabilised for many and stayed fairly consistent through the middle of June.
Demand was good, particularly for fat to be sold as cream; prices are currently a little above the butter markets.
Butter prices partially followed cream and rose on the month, but did not rise to the same extent. The spot cream market is currently above the spot butter market. The increased demand in Europe also continues to have some influence on the market. Some reports suggested spot trading was a little quiet this month.
The monthly average price for SMP also rose in June compared to May. Reports suggest that any uplift came earlier in the month with relative stability since, though with fluctuation from currency movements.
Mild cheddar movements were a little more mixed, with some reporting slight increases and some reporting stability. High retail demand is affecting cheddar supplies, though this is mainly affecting the mature end of the market. Some reported increasing interest from the foodservice side as the market slowly reopens. This helped lift the bottom end of prices.
Prices have been compiled by talking to dairy product sellers, traders and buyers. Panel discussions on market conditions and prices covered trades agreed for the period 1 to 26 June. Prices reported are indicative of values achieved over the reporting period for spot trade (excludes contracted prices). The published prices will not necessarily match the actual price received by a milk processor as this will depend, amongst other things, on the proportion of product that is sold on the spot market and the proportion sold under longer term contracts and at what price this is done. The “average” prices should be used to track trends while the commentary will contain prices seen through the month.