UK Wholesale Prices

Published 25 May 18

Market views taken for trade occurring between 1 to 25 May. Prices reported are indicative of values achieved over the reporting period for spot trade (excludes contracted prices).

As ever, the following prices represent an indicative average of UK wholesale markets. The “average” prices should be used to track trends while the commentary will contain prices seen at the end of the month.

All prices quoted are in £/tonne.

Despite the northern hemisphere going through its peak production, wholesale markets continued to rise on the back of healthy demand. Milk production was lower than most were expecting due to the poor weather, but spot prices were only around 22-25ppl. However, with most processors still running close to capacity, it is unlikely many would have managed to benefit from low spot milk prices and higher market returns.

Butter trade was described as “patchy” through the month as buyers seemed to back away from the market due to high prices. However, sellers were in a strong position, as little/no stocks were available for spot trade and production was reducing towards the latter stages of the month. As well as this, demand for cream, and a strong increase in cream prices, helped support butter prices.

The month seemed to be relatively straightforward for cream, in that trade and prices both increased consistently through the month. The price movement was strong with a range of £340 between the start and end of the month.

SMP saw a significant jump up between April and May. Volumes sold from intervention tenders increased, with the last tender realising circa. 42k tonnes. It seems this has helped boost the demand for fresh somewhat, as well as tight available stock. 

Prices for mild cheddar edged up, although trade was fairly thin. As with butter, sellers are in a strong position and only really needed to sell if the price was right. In addition, cheese bi-products performed well, helping to support this strategy.

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 25 May. 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.