Cream income dips under falling commodity prices

Published 1 November 18

The downturn seen in UK wholesale prices over the last few months has had a knock-on effect on the estimated income from cream for a liquid processor. The cream wholesale price has fallen by almost £400 per tonne over the last two months, to £1,840/tonne in October. In turn this has reduced cream income from 12.55p per litre of milk to 10.35ppl.

Cream income

In the long term, consumer tastes have been shifting away from low-fat milks, reducing the amount of spare cream processors are left with. On its own, this might have reduced the income from cream, but rising wholesale prices have far outweighed this. Even if a processor is getting slightly less cream per litre of milk, the value of that cream is substantially higher than it was three years ago. 

 

Please note that AHDB has reviewed their cream income to a liquid processor calculation and made some improvements to the methodology. In order to compare year-on-year movements under the new methodology, changes have been backdated to January 2016. If you have any queries or want to know more, please email Dairy.MI@ahdb.org.uk.