UK Wholesale Prices

Published 27 July 16

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

UK wholesale prices rose sharply in July, as milk production continued to fall. Production in the UK averaged around 10% down on the previous year (over the first 16 days of July), and production has fallen faster in the UK than on mainland Europe. As a result, there appears to be a premium developing in the UK for those who require UK origin product. As well as this, exchange rates have been supporting prices, although Sterling strengthened a bit after the first week of July.

Cream prices pushed on through the month, reaching the mid £140’s towards the end of the month. Trade was varied between buyers with those in need of product paying the high prices, but others not prepared to commit.

Butter prices rose quickly at the start of the month before settling around £2,800-£2,900/tonne for the remainder of the month. There was interest to buy in July however, completed deals were infrequent, with some traders involved in a price stand-off.

The average SMP price increased to around £100 above the intervention price. The high level of stocks in intervention and PSA (nearly 260k tonnes combined) continues to prevent SMP prices from rising as quickly as the fat market.

An increase in demand and reduced stock availability saw spot mild Cheddar prices increasing in July week-on-week. It was mentioned that more milk was being sought after to make cheese over the month. 

Price per tonne*

Jul-16

Jun-16

% diff.

Jul-15

% diff. 15-16

Butter

£2,850

£2,350

+21%

£2,050

+39%

SMP

£1,500

£1,300

+15%

£1,225

+22%

Bulk cream

£1,370

£1,100

+25%

£900

+52%

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 July. 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.