Weekly market update (7 Jan 21)

By Patty Clayton

Trading activity in dairy markets is typically quiet over the holiday period, but this year, that quietness was heightened due to Brexit contingency planning.

The threat of a no-deal exit from the EU meant most businesses had placed their product in advance.  There were a few reports of export shipments getting delayed by border disruption, but this was the exception rather than the rule.

Spot milk* was trading in the region of 25-30ppl in the week before Christmas, and fell to around 14-17ppl over the holiday period for anyone needing to secure sales. However, it was reported there were only a few loads of surplus milk looking to find a home, helped by a drop off in milk production during the cold weather at the end of December. Markets bounced back quite quickly however, with delivered prices moving above 20ppl by the last week of the year. Milk was trading this week (to 6 Jan) in the 25-27ppl range (delivered), supported by higher retail orders as the country moves into another lockdown period.

Bulk cream spot markets showed a similar pattern, with trades wrapped up in advance of Christmas. Most capacity had been pre-booked, so any spot loads over the holiday period were discounted and there were reports of a few loads traded in the region of £0.75-£1.00/kg over the Christmas lull.

Prices recovered to the £1.00-£1.15/kg range by the end of December, depending on the end-product for the fat. There is little demand for churning with weak butter demand and resistance by manufacturers to build stocks in advance of the spring peak.

Prices have firmed again this week (to 6 Jan) with deals agreed in the range of £1.15-£1.20/kg. Higher prices are said to be available on the continent (£1.30/kg delivered), although few manufacturers have yet to test the waters in exporting loads of fresh product.

*spot milk prices are quoted as delivered prices

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