UK Wholesale Prices

Published 27 June 19

Market views taken for trade occurring between 1 to 27 June. Prices reported are indicative of values achieved over the reporting period for spot trade (excludes contracted prices).

The following prices represent an indicative average of UK wholesale markets. The “average” prices should be used to track trends while the commentary will contain prices seen through the month.

All prices quoted are in £/tonne.

Fat prices declined in June, while other markets were steadier. Production is well past the peak and has started to move more in line with year-ago levels. While this means there shouldn’t be concerns about short-term oversupply, the hangover of high stocks still weighed on the market. The pound weakened further through June, which may have put some supporting upwards pressure on the price for those trading in euros.

Demand for butter continued to be lacklustre and trading activity was low. Prices continued to creep down as a result. The June average butter price is the lowest for nearly three years. Stocks reportedly remain high in both the UK and Europe. Some reports link the lack of demand to reformulation; when prices were high companies started changing their recipes to include less butter, and with changes now made their reduction in butter demand could be long term.

Cream prices saw another dip in June, particularly mid-month, with some recovery towards the end. Supplies were good with little incentive to turn cream into butter. Summertime is soft fruit season and usually there is a seasonal lift in fresh cream demand to accompany it; cool and wet weather during June may have dampened this interest in the UK. On the upside, hot weather on the continent last week pushed up demand from Europe, likely aiding the late recovery in price. With European temperatures forecast to soar this demand may continue into the coming weeks. Overall, declines were dominant in the month, with the average price down 4% on May.

The recent rally in skimmed milk powder prices appears to have ended, with prices throughout the month generally reported to be stable. However as prices were rising through to the start of the month this still puts the June average 5% above the May average.

Mild cheddar prices continue to hold steady with only small movements as trade continued to be thin.

UK Wholesale Table
                          UK Wholesale Graph              

Notes: Prices have been compiled by talking to dairy product sellers, traders and buyers. Panel discussions on market conditions and prices covered trades agreed for the period 1 to 27 June. 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.