UK wholesale prices

Updated 25 November 2021

Indicative average prices for butter, skimmed milk powder (SMP) and mild Cheddar cheese on UK wholesale markets. Bulk cream prices are weighted average prices on agreed trades within the reporting period.

Note there has been a change in the methodology for determining the bulk cream price from January 2021.

Information on prices and market conditions is gathered through a monthly phone survey of dairy product sellers, traders and buyers. Panel discussions cover prices on spot trades agreed within the reporting period and delivered within a maximum of 2 weeks for bulk cream and 6 weeks for butter, SMP or cheese. 

For butter, skimmed milk powder (SMP) and mild Cheddar, prices are indicative of values achieved for spot trades and exclude contracted prices or forward sales.

For bulk cream, a weighted average price will now be reported. This is based on submissions of an average price for agreed spot trades made within the reporting period along with total volumes traded. Data is entered by panel members via the AHDB online wholesale price portal.

Weeks 43-46 (25 October – 21 November)

It was another month of strong price increases on UK wholesale markets. Continuing tight supplies coupled with pre-Christmas demand pushed prices up across the board. Reports suggest that by the end of the reporting period seasonal demand was starting to ease off, but it was a strong driver for most of the period. 

Cream prices started the reporting period (w/c 25 October) slightly under the £2,000/tonne mark, but rose steadily over the next few weeks, with highs of up to £2,270/tonne reported. Strong bulk cream demand drove prices, including from the continent. Relatively tight supplies supported this. Returns were generally better for cream than butter. Some reports indicated that prices were starting to come down at the tail end of the reporting period, as holiday demand started to ease off.

Butter prices followed a similar trend to cream, rising through most of the reporting period. Spot butter availability was particularly short as producers were getting better returns selling cream, or potentially retail butter packets. Some reported a slight easing at the end of the reporting period, with buyers starting to hold off in response to the high prices.

Prices also rose for skimmed milk powder (SMP). Spot supplies are tight. High spot milk prices, and high energy costs, discouraged manufacturers from turning on the dryers unless the price was right. It was reported that prices rose at the start of the reporting period, but were then relatively steady. 

Mild Cheddar prices also rose off the back of strong demand and tight supplies, particularly at the start of the reporting period. Reports suggest stocks are very low, as demand has been strong while milk supplies have been tight both in the UK and the EU.

Prices for bulk cream were not weighted by traded volumes prior to January 2021. 

The published prices will not necessarily match the overall actual price achieved 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.

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