Cream Income to a Liquid Processor

Published 1 November 18

All liquid processors generate surplus cream, as little liquid milk is now sold as whole milk. This surplus cream has a value, with some sold to supermarkets in small pots and some sold in bulk, to be manufactured into other products.

Cream income table

Cream income graph

For historical information on cream income please see our downloadable cream income spreadsheet

 

The price indicates the trend in incomes, rather than an absolute value. The actual income effect and a precise increase in ppl will be difficult to obtain as this requires knowledge, on a daily or monthly basis, of the following:

  • Butterfat levels (which will tend to vary and be higher over the winter period).
  • Exact prices for bulk cream.
  • An exact breakdown of what product they are producing (i.e. whole, skimmed, semi-skimmed etc.).
  • The amount of cream wasted in the manufacturing process. 

 

Outline of how cream income is calculated:

  • The bulk cream wholesale price is based on the average price from 1 to 26 October 2018. For further information on wholesale prices please click here
  • Prices have been compiled by talking to dairy product sellers, traders and buyers. Views were taken for the period 1 to 26 October 2018. The published prices will not necessarily match the actual price received 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 cream income to a liquid processor is based on the excess cream between the rolling butterfat average for a particular year (previous 12 months, not including the current month) and the average level of fat in liquid milk sold through the retail market (supermarkets, local stores and doorstep) for that particular year.
  • The value of the excess butterfat is then calculated on the basis of a litre of cream at 40%.
  • Calculation excludes any estimation of wastage in the manufacturing process.
  • As part of the calculation for cream income to a liquid processor, the split of purchases of Whole, Semi-skimmed, Skimmed and low fat milk is calculated to estimate the level of butterfat required in the retail sector. This is now being updated biannually with data from Kantar Worldpanel.