Firmer demand boosts dairy commodity prices

Dairy market activity has picked up after a quiet August, with commodity prices reversing recent decreases.

Demand for butter was improving, boosting prices by £100/t to £3,600/t, the same as in July. “Some early effects of buying for the Christmas trade have been noted but this will pick up further during the coming weeks,” said a report by DairyCo. “However, fresh butter production in the UK is now limited by the falling volumes of milk available, so some parcels of butter are coming out of the Private Storage Aid Scheme, mainly from Continental and Irish stores.”

Bulk wholesale cream prices had risen by £40/t, to £1620/t, £20/t higher than in July. “Skim and whey powder prices have also firmed slightly as offtake levels increase to the animal feed trade across Europe.” Cheddar cheese values were mainly unchanged, although there were some reports of selective price increases for some retail and wholesale outlets.

The firmer markets meant the Actual Milk Price Equivalent increased by 1p/litre to 33.3p/litre for September.

market report