Processor price trends volatile

Published 28 March 18

Manufactures of liquid milk saw a significant jump up in the price they received for their product last autumn, although there has been little change since then. According to the Producer Price Index* (PPI) data released from the ONS, prices for manufactured liquid milk rose by more than 20% in October 2017 from the previous month. This may have been in response to the sharp drop in cream prices at the time or re-negotiation of supply agreements. The price increase means that the prices manufacturers receive for liquid milk have been well above levels seen during most of 2015 and 2016. Despite the relative volatility seen in producer prices over the past few years, retail price changes have been more constant.

Prices paid to cheese manufacturers also moved up in the second half of 2017, but have been facing downward pressure in the past few months. Overall, cheese prices have been more stable than liquid milk prices, both at the processor and retail level.

Supply Chain Price Movements