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UK Wholesale Prices
Published 27 September 16
Market views taken for trade occurring between 1 to 27 September. Prices reported are indicative of values achieved over the reporting period for spot trade (excludes contracted prices).
UK wholesale prices continued to rise in September as stock availability was low. Demand appeared to be fairly firm, although due to lack of product, actual trade was quite modest.
Cream prices started the month anywhere between low to mid £1,600s and finished mid £1,800s, for most traded stock. There were prices reportedly offered around the £1,900s, although for very small volumes and not necessarily traded. UK prices held a premium over the continent, due to the fall in UK milk production. Demand was fairly modest and with stock availability limited, prices rose through the month.
There was the suggestion that a number of butter manufacturers, in the UK and EU, have been caught out with the fall/ease in milk production and are desperately trying to fulfil contracts. This has contributed to pushing prices up over the month.
SMP went up over the month in fits and starts. Nothing significant was placed into intervention as the market across Europe picked up. The 300k tonnes plus of stock in the scheme did cause some caution in September, however, spot availability was tight resulting in an increase of price, for those in need of product.
Interest for spot mild Cheddar seemed to be lively with buyers phoning around various sellers rather than sticking to regular suppliers. This was suggested to be down to buyers looking for a better deal as well as lack of available stock. With the seemingly healthy interest and lack of stock, spot prices rose through September.
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 September. 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.