When the wholesale price of mild Cheddar dropped by £50 per tonne month-on-month, it was the first time the price of mild had fallen in seven months, sparking speculation prices for mature Cheddars - which have not yet changed but often follow movements in mild - are also heading for a fall.
The drop in mild Cheddar prices to £2,875/tonne last month [DairyCo] comes after a prolonged period of stability in the Cheddar markets, with prices pegged at £2,925/tonne since last October. Now, a downturn in butter and milk powder prices on the global commodity markets has prompted manufacturers to put more milk into Cheddar production.
With mild Cheddar not needing to be matured for long, this increased production has had a quick impact on prices - but suppliers are playing down the impact on more mature Cheddars, and some are even disputing the £50/tonne price drop is real.
Commodity prices: 23 June 2012
The price rollercoaster in the global coffee markets is showing no sign of slowing down. With forecasters predicting a record crop from Brazil, arabica prices hit a new two-year low earlier this week, and are now 41.7% below 2011 levels and down 17.7% in the past month.
Meanwhile, cheaper robusta coffee has continued to climb over the past four weeks, hitting £1354.2/tonne - up 10% month-on-month, although 7.8% cheaper than a year ago.
Prices have also moved upwards in the pulp market over the past month, providing a welcome break from the tumble in prices over recent months, although overall sluggish demand means pulp remains 12.1% cheaper than it was this time last year.
One supplier says it is important to distinguish between higher-value UK retailer contract mild Cheddar prices and product going elsewhere, such as foodservice. Although published market prices show a decline, those paid in the retail sector are largely unaffected, he adds.
Others argue although more milk is going into cheese, the quantities are not big enough to have a major impact, and as supply and demand is more or less in balance, any increased production is unlikely to affect prices. “The majority of it will be soaked up by demand, which is strong for cheese and other products,” says one source.
All eyes will be on output in the coming months, particularly given new Defra figures show the amount of milk going into Cheddar is still on the increase. If this trend continues, pressure could soon be mounting for prices to come down in all parts of the Cheddar market.