well above the intervention level. All of this could lead to a firm market until at least the end of the year.
The position is less clear for butter, although recent prices have been well above the intervention level and no UK butter has been sold into intervention this year.
The prices of all other milk products are influenced by the values of butter and skimmed milk powder. As these fall over the coming months, it will put downward pressure on the whole dairy sector.
Always a significant unknown in the UK, however, is the effect of exchange rates. All the cuts are fixed in euros, and their impact on the UK market will depend on the strength of pounds sterling against the euro.