Volatility in the butter market means it is now cheaper for manufacturers to buy it in Tesco than from a wholesaler. Bulk butter spot rates have soared by more than 60% already this year to about £2,500 per tonne or more. But packet butter is still available in the major multiples as low as 53p per 250g - equivalent to £2,120/tonne, or 15% cheaper than the spot price. "For users of bulk butter this suggests it would pay to buy packet butter at these low retail prices and strip off the packaging," said dairy consultant Michael Bessey. Mature Cheddar is trading at a lower price than mild Cheddar, despite higher production costs, because mild prices have risen by more than 30% on the spot market to more than £2,500/tonne while mature Cheddar has remained locked in static contracts. "No doubt these anomalies will be ironed out over the coming weeks," said Bessey. "But, with dairy markets having moved with such speed, some topsy-turvy prices are still operating," he added.

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