UK wholesale prices
Updated 27 November 2020
Indicative average prices for UK dairy wholesale markets, including bulk cream, butter, skimmed milk powder (SMP) and mild Cheddar cheese.
Lockdowns across the UK had an impact on dairy wholesale markets, although not the same extent as in the spring. With supply chains already operating under Covid conditions, there was limited impact on pricing, affecting mostly fresh product. On average, cream saw the biggest drop in value, with both SMP and mild Cheddar remaining stable.
Bulk cream prices saw a significant drop early in the month, when the 4-week lockdown for England was announced. Strong demand on the continent, as manufacturers prepared for the seasonal upturn in sales, helped clear surplus product and markets firmed in the middle part of the month. In the final week of the month, the EU import demand was reported to have dropped off, and prices weakened somewhat from the previous week.
The prices quoted are indicative averages for the month based on all quotes obtained from participants. They are not weighted based on the number of trades done because the volume traded is not reported to us.
*Subsequent reports suggest that the cream price of £1,370/tonne is at the high end of the range of prices in the month. It is therefore likely that, if a weighted average had been used, the few trades which occurred early in the month at higher prices would have had less influence. As such the overall weighted average would have come out lower.
Butter prices fell in November as trade remained thin on weak demand. A stronger pound relative to the euro also had a negative effect on prices. Demand from the industrial segment of the market remains weak, but was partially balanced by sales into retail.
SMP prices were largely unchanged in November. There was some firming of prices on the continent, but this did not translate into UK prices due to currency movements.
Mild cheddar remain steady. Stocks of mild cheddar are still reported as limited as manufacturers hold them for maturation to help satisfy the elevated retail demand.
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 November. 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.