UK Wholesale Prices

Published 24 August 18

Market views taken for trade occurring between 1 to 24 August. Prices are not expected to change too much between now and the end of the month, but any changes will be picked up in September's survey. 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.

Overall, markets picked up in August as demand from the continent supported UK prices. This demand seemed to be driven by weather affecting key EU producing Member States. In Britain, milk production appears to be holding up fairly well although many farmers are using this years’ winter feed. The uncertainty over milk production has traders on a knife-edge. Good weather now could see milk production pick up in the back end of 2018. However, there is concern that milk production will falter towards the end of the year due to uneconomic feed costs.

The demand from the continent has been influencing UK cream prices the most. Concerns over key EU milk producing nations being impacted by hot, dry conditions has meant exports have risen. However, the cream is not thought to be used for butter production but rather filling a gap for the fresh market.

The impact of cream has been seen in butter prices too, although not nearly to the same degree. Trade has been fairly quiet with prices only really rising as a reaction to cream rather than a specific butter market factor.

Fresh availability and continent demand has seen SMP prices rise slightly between July and August. Prices on the continent, and thus the UK, are still behind the intervention levels.

Not much activity was seen in the mild cheddar market for August. Sellers are, largely, in no rush to sell with stocks not plentiful. Buyers too do not appear to want to rush positions, keeping the August price stable.

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 24 August. 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.