UK wholesale prices

Updated 25 July 2022

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 26-29 (27 June - 22 July)

UK dairy wholesale markets saw some weakness this month, with butter and SMP prices down on the previous month. This is not unusual for July, as the summer holiday season means there is little interest in buying. However, alongside this there are signs of reduced demand in response to high prices. Negative movements on international markets is said to be adding nervousness. The downward move in prices has led to buyers holding off awaiting further falls. Overall, this has put downwards pressure on prices, and it will be a couple of months before we know if this was due to the short-term holiday lull or to lower demand.

Cream prices had a mixed month. There was a price increase in the first part of the reporting period, with prices of over £2,900/t reported for early July. However, this rise was short-lived, and prices quickly returned to the £2,800s. Conversely, in the last week of the reporting period, many reported prices falling into the mid-high £2,700s. This was driven by some plant closures adding extra product to the market and was therefore also considered temporary. Altogether the average price for the month was £2,850/t, up 4% on June.

Butter prices weakened through the month. The market was very quiet, with most traders on holiday, particularly in Europe. With little activity, the price drifted downwards. There was some additional buyer nervousness around reduced demand, so those not on holiday were thought to be waiting on further price declines.

Weakening international markets put downward pressure on SMP prices in July. Notable declines at the July Global Dairy Trade events were thought to have influenced sentiment. However, there was also the seasonal effect of the summer holiday period, which for the UK and Europe may have had a stronger impact in the short term. Overall, the average SMP price for July was 3% below June, though prices ended the month lower than the average.

Mild Cheddar markets were equally quiet, but more stable as very little spot trade occurred. Price reports were a mix of steady pricing and of a marginal £50/t drift downwards. As prices had risen a little through the previous month, this kept the overall averages for June and July in line with each other.

 

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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