UK wholesale prices

Updated 23 December 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.

Overview

Weeks 47-51 (22 November – 22 December)

December is always an unusual month for prices, as festive demand followed by Christmas closures adds extra dynamics to the markets. However, this year the period seems to have been more unusual, with the dip in pricing that some were anticipating just before Christmas not materialising quite as expected. Instead, tight milk supplies continued to support product prices, and high spot milk prices meant a lesser share of milk went into our reported products. Some also reported a rally in demand when buyers holding out for lower prices realised they may not come. This further lifted prices.

Cream prices did ease back from the highs seen in November, with the December average down 4% on the month. This dip mostly happened in the first half of the reporting period. Prices then rallied somewhat in the latter half of the period as demand picked up again. Reports indicate this came from domestic potting cream demand and from some continental buyers. Although the average price is down on the month, it is important to note that it is still higher than many expected. It was thought that prices would go back below £2,000/tonne, but in the end only a scant few saw it go below that mark, and not for long.

Butter prices continued to climb in December. Some reports indicated that prices had gone as high as £5,000/tonne by the end of the reporting period, though the majority reported slightly below this. Spot markets had very little product available, and buyers are focusing on securing supply for the New Year. Some saw a little dip in price earlier on in the reporting period, but when it then rose again this encouraged buyers who were holding out for low prices to come in, further increasing demand.

Prices for skimmed milk powder (SMP) continued their upward trend. The spot market was reportedly very quiet. Not much product was made during the reporting period, with milk often being sold as liquid instead. The SMP price averaged £2,750/tonne for December, the highest since the start of 2014.

The rise in prices also continued for mild Cheddar. Supplies continue to be very tight, with almost no spare product around. Some indicated that the gap between mild and mature cheddar prices narrowed, or in some cases closed completely. The mild Cheddar price averaged £3,600/tonne in December, the highest price on our records, which go back to 2000.

Additional information

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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UK wholesale prices

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