Ample milk supplies and the strengthening pound against the euro have put pressure on some dairy commodity prices during January.
Although values for skimmed milk powder and cheddar remained unchanged on the previous month, cream and butter prices fell by 9% and 5%, to £1,500/t and £3,300/t, respectively.
“Good supplies of cream and butter on the back of ample milk availability, along with increased import competition as butter stocks from New Zealand have come onto the market, has put downward pressure to prices,” said a report by DairyCo.
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However, strong global demand for skimmed milk powder – along with competitive EU and UK prices – was keeping powder export markets open. “Cheese markets have been quiet and prices have remained unchanged.”
DairyCo’s Actual Milk Price Equivalent, based on a basket of commodity values, fell by 0.9p/litre on the month, to 37.6p. Buyers were only entering the market for short-term cover as we move towards peak milk production.
UK daily milk deliveries averaged 37.9m litres in the two weeks to 18 January – 10.8% higher than the same time last year and 7.7% above the three-year average.