UK dairy commodity prices see sharp fall in September

Domestic dairy commodity prices dropped sharply in September, following the weaker global and European trend.

“Prices for all dairy products declined as buyer demand remained weak relative to supply,” said a report by DairyCo.

“Strengthening sterling is adding further pressure to UK prices as they move to stay competitive with the Continent.”

Cream prices – supported slightly by reduced milk butterfat contents – lost £80/t, to £1,120/t. Butter values fell by 10%, to £2,375/t, with some manufacturers using private storage aid to manage stocks rather than discounting on the open market.

And skimmed milk powder markets dropped by 12.5%, to £1,750/t, as milk was diverted from cheese production to powders.

Despite limited trade of UK cheddar, weaker mild cheddar prices from the USA and EU had led to a £200/t drop in domestic values to £2,750/t, said the report.

Based on butter and powder markets, DairyCo’s Actual Milk Price Equivalent fell by 14% on the month to an average of 23.5p/litre – 16.4p below the same time last year and the lowest since summer 2012. The Milk for Cheese Value Equivalent lost 7.5%, to 28.9p/litre.

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