UK Wholesale Prices

Published 27 September 17

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

On the surface, average prices for most dairy products haven’t changed much between August and September. Under the surface however, there has been a significant shift in the fats market (cream and butter), with prices dropping in the last part of the month – a reversal from the pattern seen in August.

Contributing to the decline in prices was the improved value of Sterling against the Euro, which rebounded from around €1.09 at the beginning of the month to €1.14 currently.

Pricing in both the bulk cream and butter spot markets in the first part of September remained at the high levels seen in the latter part of August. Cream was trading at around the £2,950/tonne mark early in the month, with butter remaining around the £6,400/tonne. However, the combination of the stronger value of Sterling against the Euro, improved supplies and a pull-back in demand has pushed down prices for cream in the last week or so. Product is now reported to be trading around £2,720/tonne, or even lower. Butter prices have fallen in line with cream, with reports of some trades being agreed for as low as £5,700/tonne.

With intervention to close at the end of September, SMP prices remain under pressure, although there is little demand for near-term sales. Average prices in September are marked down by £25/tonne on the back of exchange rates.

Spot prices for mild cheddar have held up well in the month, with prices moving up marginally (0.7%) on the back of firm demand. Stocks are reported to be relatively well balanced.

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 27 September. 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 with their contact details.