UK Wholesale Prices

Published 27 June 16

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).

While the reporting period had some overlap with the announcement of the results of the vote on UK membership of the European Union, the reported spot prices were not significantly impacted. Very few spot trades agreed after 23 June are included in setting the indicative average for June, and therefore have not impacted on the overall figure.

Following on from the price increases seen in the second half of May, markets continued to firm through June, pushing wholesale prices up. This was driven by the slowdown in milk production combined with heightened seasonal demand, both in the UK and on the continent.

Cream and butter prices rose quite dramatically through the month as supplies for spot deals were thin. The soft fruit and asparagus season lifted demand for cream and butter, putting pressure on available fat supplies (which are down with a result of slowing milk production) and pushing up prices steadily through the month.  

Bulk cream loads were reported to be difficult to obtain, and trade was very thin given the rapid increase in pricing through the month. Butter stocks in PSA are relatively high, leading to the possibility that the strength in the market is seasonal or that manufacturers are holding relatively little unsold stock.

The spot value for SMP increased only marginally in June on the back of changes in the exchange rate. Prices remain around the intervention level, but with less discounting as most product not meeting intervention requirements has already been sold.

Spot prices for mild Cheddar also rose through June, following patterns established in the second half of May. Spot market prices rose week on week through June, with reports that manufacturers are holding little unsold stock. Buyers needing product in the short term therefore needed to offer higher prices to agree deals.

Price per tonne*

Jun-16

May-16

% diff.

Jun-15

% diff. 15-16

Butter

£2,350

£2,025

+16%

£2,150

+9%

SMP

£1,300

£1,250

+4%

£1,275

+2%

Bulk cream

£1,100

£860

+28%

£1,000

+10%

Mild Cheddar prices are available upon request (see below for more information)

                        Source: AHDB Dairy  

 UK_wholesale_prices

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. 

AHDB has made the decision to suspend publication of wholesale mild Cheddar prices as of January 2016 due to the lack of spot trade and the inability to quote a price representative of completed spot deals.

The lack of trade has highlighted limitations of the spot price and increased the risk of misperceptions of what the price represents. In Cheddar markets, where a large proportion of sales will be on contract, spot prices can vary significantly from contracted prices – especially when stock levels are out of kilter with demand. More information available.


AHDB Dairy will continue to monitor Cheddar markets and gather intelligence from the trade on activity in this market. However, to avoid misunderstanding we have taken the decision to share price information only after the opportunity to discuss it on a one-to-one basis.


We will continue to work with the industry to improve the reporting of wholesale Cheddar prices, with the aim of beginning to publish the prices again in the future. Anyone who is interested in receiving the average spot price for mild Cheddar, or in helping AHDB improve the price reporting process should email datum@ahdb.org.uk with their contact details.