Butter/SMP returns exceed Cheddar for first time in 16 months

Tuesday, 5 November 2019

By Kat Jack

October returns for processors making butter and SMP exceeded returns for producing mild Cheddar – the first time in 16 months, according to our AMPE and MCVE* market indicators.

graph of AMPE and MCVE

MCVE had been running higher than AMPE, but the two values have recently converged. On the AMPE side the increase in value has been mainly driven by the rising value of SMP. With intervention stocks no longer weighing on the market, and muted growth in EU milk production, market supplies of SMP have been tighter while buying interest has been good. This has counterbalanced the butter price, which has overall been on a downwards trend.

On the other hand, declining whey prices have eased the MCVE value despite a steady mild Cheddar price.


*AMPE (Actual Milk Price Equivalent) is an indicator of the factory gate value of a litre of milk used for butter and skimmed milk powder
*MCVE (Milk for Cheese Value Equivalent) assess returns from mild Cheddar and whey powder/butter.

Katherine Jack

Analyst - Dairy

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