UK wholesale prices

Updated 27 September 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 34 - 38 (23 August – 24 September)

The end of the holiday season saw buyers return to the markets, which combined with relatively low milk deliveries, firmed dairy markets. Strong fat demand on the continent offered some support to prices in the UK for those able to access that market.

Cream prices rose steadily through the period, with demand reported as strong. Sluggish milk production kept cream supplies tight, and transport issues added pressure as available supplies were not always in the right place. High prices on the EU markets added further support for those able to access it, although a gap remains between UK and EU pricing.

Butter prices remain disconnected from cream, with markets not yet able to return equivalent value to the high cream prices. Demand from churns dropped and supplies have tightened, particularly for fresh product. Market demand is however up slightly, with some buyers still looking for Q4 coverage. This has helped to pull up the average in the reporting period, although prices remain below the cream equivalent.

SMP markets were also firm, as supplies remain tight and demand stable. The low level of milk deliveries within the EU has inflated the price of skim concentrate, impacting on powder production; a similar situation to cream & butter. With SMP availability at relatively low levels, this has firmed pricing.

Mild cheddar prices also moved up in the period. Demand is good as schools reopened after the summer break bringing a return to foodservice demand, albeit slowly. Increased demand for curd, as well as the recent drop off in milk production in the EU, were given as the main drivers for the increase.

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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