World wholesale prices
Updated 19 March
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.
EU wholesale markets saw price reductions in February on the back of the mild winter and the seasonal increase in milk production. .
- Sufficient butter stocks have seen the price fall slightly during February. Reports suggest that demand is steady with plenty of interest but as production increases seasonally buyers are not concerned about availability.
- The price of SMP fell during February as buyers adopted a wait and see approach. Expectations are for availability to improve as European milk production enters its seasonal increase and production ramps up.Exports are slower as coronavirus impacts demand, and creates logistical challenges in the transportation and unloading at ports.
- WMP markets also remained quiet during February. Current production is said to be keeping up with demand, which is mainly within the EU. Oceania is a cheaper option globally, so export demand out of the EU is limited.
Milk production in Oceania remains low on the back of adverse weather events in Australia, and New Zealand. Reduced herd sizes may impact on future production as well, influencing buyer behaviour.
- Butter prices moved slightly higher in February. Seasonally declining milk production and concerns around stocks put some upward pressure on prices. The price of Oceania butter was higher than the EU and US potentially impacting exports.
- SMP prices fell during February owing to the uncertainty around the duration and scale of coronavirus in China. Quarantines have slowed buying and all but stopped the movement of goods through the supply chain.
- Prices for WMP also fell slightly, China is often the largest market for WMP and, as with SMP, the impact of coronavirus has reduced Chinese demand.
- Cheddar markets moved up during February. China is not such a key market for Oceania for cheese and as such events there are not impacting Cheddar so much. The seasonal reduction in production and the lack of available stock has provided upwards pressure to prices.
Milk is plentiful in the US as it heads towards the spring flush. Fat prices dropped due to the increased availability of butter and price convergence in the Cheddar markets, but powder prices have risen.
- Butter prices fell in February on the back of plentiful supplies. With plenty of cream around, cream prices were competitive and butter production was very active, building stocks.
- WMP prices rose slightly, although the supply and demand situation was reported to be balanced. Stocks are being sold mainly domestically, due in part to the higher price of US product but also because of concerns about shipping outside the US.
- Cheese production was very active in February, and Cheddar prices dropped on the back of good availability of milk and cream to manufacturers. The market is reported to be a little shaky as a result of the global coronavirus situation which has added no support to prices.