UK wholesale prices
Updated 22 December 2020
Indicative average prices for UK dairy wholesale markets, including bulk cream, butter, skimmed milk powder (SMP) and mild Cheddar cheese.
Prices have been compiled by talking to a panel of dairy product sellers, traders and buyers. Panel discussions on market conditions and prices cover trades agreed for the period 1 to 21 December. Prices reported are indicative of values achieved over the reporting period for spot trade (excludes contracted prices).
There was a great deal of nervousness in the markets in December, particularly for fresh product. Demand from EU buyers has dropped off given the uncertainty around future trading conditions. For most products, the shift towards UK product and holiday demand has helped to keep prices relatively stable. Cream prices have seen more volatility, particularly as we approached the end of the month and logistical issues seriously impacted shipments to the continent.
Bulk cream traded in the region of £1,300-£1,350/tonne early in the month, supported by demand for the potting market. Concerns around product origin and logistics meant sales dropped off from the middle of the month, with prices falling to the mid £1,250 level. More restrictive lockdowns and the closure of borders to UK traffic meant supplies were more difficult to place. As a result, prices on agreed deals in the final week of pre-Christmas trade fell sharply to below the £1,000/tonne mark.
Butter prices saw a small drop in December, although there was very little trade. Some last minute holiday cover held prices at the start of the month, with stocks reported as sufficient to cover the short-term demand. Buyers were, however, reported to be hesitant to commit due to the uncertainties surrounding pricing in the New Year. The weaker cream prices put downward pressure on butter, and prices saw a small drop of around £50/tonne on average.
SMP prices moved up slightly in December, in line with firmness on the EU markets. A weaker pound relative to the euro has also helped to support prices.
Mild cheddar prices moved up marginally on increased interest from domestic buyers for short-term cover. However, trade on spot markets was reported as thin, with both buyers and sellers holding back from agreeing deals until there is more clarity on future trading conditions.
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 21 December. 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.