UK wholesale prices

Updated 25 May 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 17-20 (26 April - 23 May)

Wholesale price movements were a mixed picture this month. Butter and cream prices fell on the month as the flush raised supplies, but mild Cheddar held steady and SMP prices rose. The further easing of coronavirus restrictions on foodservice resulted in some increased buying interest, and potentially supported some prices, but did not lift them in its own right.

Cream prices moved around a fair bit within the reporting period as we reached and passed the production peak. Although trading at the higher end of the range supported prices, the overall average was still down on the month.

A two-tier market has continued to develop for cream. With UK prices lower than those on the continent, sellers who are able to export UK cream to Europe can fetch a higher price than selling domestically. However, the export price is still at a discount to EU cream sold within the EU, as trade friction and rules of origin regulations mean buyers are hesitant to purchase UK product.

Butter prices slipped a bit on the back of plentiful cream supplies. The picture was somewhat mixed, with some traders seeing declines and others seeing stability. Prices at the top end of the market fell, while the bottom of the market remained firm.  Overall, this resulted in a lower average price for the period.

SMP prices continued their upwards trend, following global markets. Strong demand for powders, from feed demand in the Far East and recent tenders, continue to support the price.

The mild Cheddar price was steady on the month at £2,980/tonne. Some traders had a quiet month while others saw a small increase in demand as lockdown eases further. This supported prices but was not enough to lift them.

The December quote included prices on spot trades agreed between 1 - 21 December, delivered within a 2-week window for bulk cream and a 6-week window for storable products. 

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.