UK wholesale prices
Updated 27 August 2020
Indicative average prices for UK dairy wholesale markets, including bulk cream, butter, skimmed milk powder (SMP) and mild Cheddar cheese.
The holiday season has meant trade on wholesale markets was relatively quiet through August. Cream prices rallied in the latter part of the month, while powder prices moved down slightly. The government-backed “Eat Out to Help Out” scheme helped boost foodservice sales, bringing some demand back to this segment of the market.
Fat prices held up well in August, particularly for fresh cream. Higher foodservice demand, combined with a shortage of cream in parts of the EU, pushed up cream prices in the latter part of the month. Yields dropped in key producing regions, including the UK, due to the hot weather experienced earlier in the month.
Butter prices were mostly reported to be steady, as retail demand continued to prop up the market. The higher cream prices put some upward pressure on pricing, although this was limited to those buyers in need of short term cover. The overall sentiment in the market was described as hesitant due to uncertainties surrounding demand recovery in the final quarter of the year.
SMP markets were generally quiet, with some weakness seen in the early part of the month. After a small drop early on, prices then remained steady through the remainder of the month.
Mild cheddar prices held steady again in August. Trade remained quiet, and stocks well balanced as most milk is currently being directed to rebuild mature stocks.
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 27 August. 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.