UK wholesale prices
Updated 25 September 2020
Indicative average prices for UK dairy wholesale markets, including bulk cream, butter, skimmed milk powder (SMP) and mild Cheddar cheese.
Dairy wholesale markets firmed in September, with prices moving up for all products but mild Cheddar. The higher pricing has come from additional demand from the foodservice sector, as well as the impact of currency movements. EU demand for fresh cream has helped support the domestic market, although this was reported to be weakening in the latter part of the month.
Bulk cream prices remained firm through most of September, as demand on the continent kept available supplies tight on the domestic market. Despite limited appetite to buy fresh cream for butter production, continued demand from the foodservice sector kept prices near the £1,600/tonne mark in the early part of the month. Prices weakened later in the month as availability improved.
Butter prices rose on average, driven by demand for fresh butter. With retail demand remaining strong, there was sufficient pull on fresh stocks to allow for some price increases. However, demand from the industrial segment of the market remained weak, and with ample stocks of frozen or PSA butter, prices here remained under pressure.
SMP prices moved up in September, although this was put down to currency movements rather than any shifts in supply or demand. Availability for short term cover was described as limited, although demand remained at low levels, keeping the market relatively well balanced.
Mild cheddar prices once again were unchanged in the month. There were some reports of tighter stocks due to the return of foodservice activity as schools and universities re-opened, although this has not yet translated into price increases.
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 25 September. 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.