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UK Wholesale Prices
Published 27 February 17
Market views taken for trade occurring between 1 to 27 February. Prices reported are indicative of values achieved over the reporting period for spot trade (excludes contracted prices).
Prices for most dairy products continued to fall on spot markets in February, at least through the first part of the month. Prices rallied a bit at the end of the month as availability for some products tightened and export demand remained strong. However, trade remained limited with buyers and sellers both holding firm on prices while there remains some uncertainty over milk availability in the run-up to the spring flush.
Cream prices started the month low, falling as low as £1,500/tonne in the first few weeks. Markets firmed nearer the end of the month as milk deliveries slowed and fat availability became relatively scarce, although not sufficiently to recover the value lost in the early part of the month.
The butter market followed a similar pattern, with prices falling by £150-£200/tonne through the early part of the month. With little stock overhang, and export demand strong due to the competitiveness of European prices, values rose slightly at the end of the month.
The average SMP price fell again in February on spot markets. High stocks continue to overhang the market, keeping buyers in the driving seat. While the top end of the market was reported to be relatively stable, sellers dropped prices to secure sales for non-specialised product.
Trade remained thin on the market for mild Cheddar as both buyers and sellers are holding off until they have a better view of milk production in the spring. The average price fell slightly in February, but mainly due to lower spot prices for milk and cream impacting on mild cheeses.
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 February. 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.