Pricing in bulk butter spot markets during the first part of September remained at the high levels seen in the latter part of August. However, with the combination of the stronger value of sterling against the Euro, improved supplies and a pullback in demand we are hoping to see prices drop as November approaches.
With intervention to close at the end of September, SMP prices remain under pressure, although there is little demand for near-term sales. Average prices in September were marked down by £25/tonne on the back of exchange rates.
Spot prices for mild cheddar have held up well in the month, with prices moving up marginally (0.7%) on the back of firm demand. Stocks are reported to be relatively well balanced.
With crops in the UK & Northern Europe market up on the 5 year average, there is a plentiful supply which has seen a considerable reduction in price. This should remain low over the next 12 to 18 months.
A shortage since March 2016 means that demand has been high for the new crop and prices have risen in response. Some exporters have been unable to secure enough raw material for forward enquiries (beyond December) and have withdrawn.
Subsequently there is an expectation that prices will remain very firm for at least the next 3-5 months.
Prices remain firm as alternative origins, such as Iran and China are actually quite high, therefore are not providing much competition for Turkey. Despite a good crop and carryover, prices are not easing off. It is now a case of waiting to see if demand subsides before prices will drop.
Monthly global export figures are increasing therefore, despite a good crop estimate, prices remain firm. Due to a deteriorating exchange rate the price of processed almonds is also rising.
After the culling of around 15 million birds throughout Europe and a ban on the eggs of a further 20 million who are also likely to be culled, the availability of raw material continues to worsen. The eggs from these birds are already banned, equating to around 10% of Europe’s flock.
Presently there are no eggs on the free market and it is a fight to buy anything with the ability to secure raw material becoming an auction. As a net importer of egg, Britain is hugely affected by the problems in Europe and with the Christmas production rush now starting we would not rule out further price increases.