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Archive: Cheddar Supply Chain Margins

Published 8 August 14

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The 2013/14 Cheddar Supply Chain Margins report, published this week, is characterised by strong global commodity markets, caused by the depletion of stocks which happened as a result of reduced global milk production in the 2012/13 milk year. 

UK wholesale prices for mild and mature Cheddar rose in 2013 due to this tight stock situation. 

DairyCo analyst, Rebecca Hughes explains: “In response to improved returns from the robust wholesale markets and competition for raw milk supplies between milk buyers, the UK farmgate milk prices began to increase and were around 4 pence per litre higher in 2013/14 than in the previous milk year. 

“While wholesale and farmgate prices rose, retail competition between the big five retailers and the discounters, such as Aldi and Lidl, restrained price increases for Cheddar at the retail level. 

“Furthermore, processor gross margins were largely stable over the year, but are likely to come under pressure in 2014/15 as global wholesale prices move to lower levels, as markets adjust to the improved global supply situation.” 

The full report can be downloaded from dairyco.org.uk/resources-library.  

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