World wholesale prices
Updated 09 September 2020
This price series looks at the average wholesale prices of certain dairy products from the EU, Oceania and the US. It aims to provide an overview of global wholesale price movements which can affect prices closer to home.
European wholesale markets were mixed in August, but monthly average prices for butter and powders were up on the month and the year.
Butter price movements were mixed, with top end prices rising in the first half of the month but then falling back when demand did not keep pace with price. At the lower end however the price steadily rose through the month. Increasing prices for spot cream were a factor in firming butter prices in the first half of the month.
Skimmed milk powder prices were variable, with generally weakening prices mixed with a few anomalous highs in the first half of the month. Hot weather in the second half of the month reduced production and gave some support to prices.
Whole milk powder markets were quiet, with lower sales interest. Export demand was reportedly lower compared to earlier in the year.
Milk production in Oceania is building up from its seasonal low point around June. The expectation of increased production to come means some buyers are happy to wait if they think they will get a better price later on. Overall, wholesale price movements were mixed.
Seasonal increases in butter production put pressure on prices. A few limited sales did hold the top end of pricing through the month, but the bulk of volumes saw easing prices.
Reduced export demand and an expectation of increased production to come caused whole milk powder prices to ease in August.
Skimmed milk powder weakened in the first half of August, following similar market patterns as WMP. However there was an unexpected uplift in price in the second half of the month that brought up the monthly average overall. This rise was contrary to expectations, and reports suggest buyers are hoping it is short-lived.
Cheddar prices fell in August, though were steadier in the latter half of the month.
Wholesale market prices were down on the month, though this fall was more significant for butter and cheese.
US butter prices fell 15.3% on the month, as renewed coronavirus restrictions meant lacklustre demand from the foodservice sector.
Cheese prices also fell significantly between July and August (down 18.5%), but this was following exceptionally high prices in July. The August price was slightly below June and in line with prices seen towards the end of 2019. Demand from the foodservice sector remains uncertain.
Powder prices were only slightly down on the month for both SMP and WMP. WMP markets have been described as ‘unsettled’, and some drying schedules are currently prioritising SMP. However, supply was still adequate.