UK Wholesale Prices

Published 26 January 18

Market views taken for trade occurring between 1 to 26 January. Prices reported are indicative of values achieved over the reporting period for spot trade (excludes contracted prices).

As ever, 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 at the end of the month.

All prices quoted are in £/tonne.

UK milk production normally increases through January. This year, milk production has been relatively stable, and this appears to have mitigated fears that we will be awash with milk, at least for now.

2018 started sluggish for most with prices easing in the early stages of January. However, export enquires for butter and cheese, as well as domestic demand, helped support prices through the month. Little to no available spot stocks also provided some support. Sterling strengthened against the Euro, which did put a bit of pressure on those looking to export product to the EU. Most buyers continued with a short-term purchasing strategy although longer term enquiries appear to be happening. However, uncertainty over flush milk is a barrier for deals being done.

Cream prices dipped right at the start of Jan, following the holiday season, although not a great deal of trade was conducted. Prices firmed during the month as demand, or at least interest, picked up. Prices ranged between £1,500 and £1,600 averaging in the middle. Cream generally traded lower than the butter equivalent suggesting more availability of cream than butter.

Butter prices shared the same January trend as cream, easing early in the month before increasing and firming for most of the month. While the future is a bit uncertain as we head towards the spring, what is clear is supply and demand is finely balanced at present.

SMP continued to fall through January, with currency being the main influencer. Sterling has strengthened against the Euro, although that was partly due to the Euro weakening against the US Dollar. This exaggerated the UK price, which meant prices had to fall to compete with the EU prices.

There seems to be a two-tiered level of need in the mild cheddar market. Those that need to buy and those that need to sell. Prices ranged between £2,600 and £3,200 with those sitting on stocks may be looking to shift some product at a slight discount/competing with cheaper EU product. However, if stocks are not an issue and buyers are looking for British product then a market premium was still achieved in January.

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 26 January. 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.