AMPE and MCVE continue to gain ground

By Patty Clayton

AMPE and MCVE continue to trend upwards, on the back of rising dairy product values. Recent improvements in butter prices have helped close the gap between the two indicators, with AMPE now only 0.34ppl lower than MCVE.

MCVE has been consistently rising over the past 12 months, supported by the strong demand for cheddar at retail keeping prices firm throughout the various lockdowns. While mild cheddar prices have remained stable through the year, rising values for whey powders has contributed to the recent increases in MCVE.

Meanwhile, AMPE was much more volatile in 2020, as different demand patterns in butter and skim milk powder (SMP) markets affected price movements.

For butter, wholesale prices had been declining throughout 2019 and into 2020, as demand from the industrial sector remained weak following the volatility experienced during 2017 and 2018.

Following the dip which occurred in the immediate aftermath of lockdown, strong retail demand supported butter prices through the summer and early autumn. Prices then dipped down in the autumn as schools reopened, but quickly started rising in late 2020 as a new lockdown was imposed, and Brexit approached. In the year to April 2021, prices have increased by £1,060/tonne (44%).

Skim milk powder prices have been steadily trending up over the past year, increasing by 24% in the past 12 months. In this market, relatively tight availability, along with strong demand for protein from China as they rebuild their pig herd, have been the main factors supporting prices.

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