UK wholesale prices

Updated 25 January 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 52-3 (27 December – 21 January)

The new year started as it ended, with tight supplies putting pressure on markets.  After the post-holiday lull, markets bounced back into action with buyers returning to cover short-term needs.  There was some hesitancy around longer-term deals as the market looked for more direction on milk production in the approach to the flush.  GB milk production remains below expectations, and there remains uncertainty whether the price increases coming into play will be sufficient to cover costs and provide the incentive to increase production. While trade was not brisk, prices rose steadily through the month across the product range.

Cream prices eased after the holiday period, starting the reporting period in the region of £2,000/tonne. However, they quickly recovered and resumed their steady upward trajectory through January, reaching highs of around £2,250-£2,300/tonne. Prices on the continent have eased somewhat this month, which has reduced the incentive to export. However, limited milk deliveries and higher cream volumes going for churning offset any benefit.

Butter prices remained firm through the month, rising on average by around £200/tonne. Spot market availability remained tight, as manufacturers struggled to replenish stocks. Uncommitted stocks are said to be sparse, pushing up prices, although buyers are said to be limiting deals to short-term needs.

Prices for skimmed milk powder (SMP) move up again in January. Reports suggest production levels remained limited to contracted volumes as the high spot milk prices and significant rises in energy costs ate into any product returns. The SMP price averaged £2,910/tonne for January, a 10-year high.

January also saw a 10-year high average price for mild Cheddar. As with other markets, supplies continued to be very tight, and demand firm. The low milk supplies are keeping curd prices high, which is limiting production of young cheddar.

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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