UK Wholesale Prices

Published 21 December 17

Market views taken for trade occurring between 1 to 21 December. 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.

All the industry wants for Christmas…is a simple, steady wholesale market, but unfortunately, Santa has not come early this year.

UK milk supplies are up on last year, although the gap has been closing recently. However, even this does not paint the full picture as last year’s production was affected by the milk reduction scheme and weather. In fact, UK production this year has run more in-line with the 3-year average. As well as this, feedback is that there is very little stock available without a name already on it. Despite this, prices continue to fall as sentiment of expected flush production applies downward pressure.

There was a circa 30% range in cream prices with some seeing prices staying high (around £1,900), some seeing prices stay low (around £1,600) and then others quoting anything from £1,550 to £2,100. For most, cream prices were at the higher end at the start of the month due to final Christmas demand and potting. However, during the week up to Christmas prices fell sharply as strong demand has effectively stopped until the New Year, with only a few minor deals potentially still to be done. Tonnage varied as well, with some seeing tight trade and some experiencing the usual trade volumes.

Butter was similar to cream. The percentage range in prices was similar; however, trade was a lot thinner. Some viewed the market strong to start before falling back, some saw prices stable around £4,000 while others saw prices weaker through the month. Prices quoted ranged from £3,600 to £4,700in December.

SMP is pretty much the EU price converted into sterling, with transport costs taken off. Without the artificial floor from intervention and with the vast amount of intervention stocks hanging over the market, prices fell further.

With EU cheese prices reportedly falling quickly, expectation may have been for a significant drop in UK mild cheddar prices. Although prices have come down, the drop has been limited thanks to less than ample stocks and a fair bit of interest for UK product. However, the amount of product actually traded was small.

UK Wholesale Table
                          

UK Wholesale Graph

Note: the survey was conducted between 19-21 December. However, views included the week between Christmas and New Year. If any significant deals are completed that could have impacted the December spot prices, AHDB will pick this up in the January survey and revise appropriately. 

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 21 December. 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.