Mild Cheddar

Mild Cheddar processor gross margins are based on the difference between the wholesale price of mild cheddar and the DEFRA farmgate price. Income from whey is ignored in this calculation – in reality this will increase the margin - for further details see Mild Cheddar Value Equivalent (MCVE).

Mild cheddar retailer gross margins are based on the difference between the retail price and wholesale price of mild cheddar. The retail price is an average weighted price for mild cheddar from TNS data.

For more details see the Dairy Supply Chain Margins Report.

Mature Cheddar Margins

Mature Cheddar processor gross margins are based on the difference between the wholesale price of standard mature cheddar and the DEFRA farmgate price. Branded or niche mature cheddars will achieve higher wholesale prices and hence margins will be higher. Income from whey is ignored in this calculation – in reality this will increase the margin.

Mature Cheddar retailer gross margins are based on the difference between the wholesale price of standard mature cheddar and the weighted average retail price of supermarket label mature cheddar (TNS data). Branded or niche mature cheddars will achieve higher wholesale prices and retail prices.

For more details see the Dairy Supply Chain Margins Report.

The DEFRA farmgate price is an average of all farmgate prices and will lead to small discrepancies in the margin, as different processors will pay more or less than the average price. However, discrepancies should remain relatively constant year on year therefore the change in margins over the past 10 years should be accurate. The reason for not trying to more accurately estimate the farmgate price is that although it is possible to estimate a standard litre direct milk price – it is not possible to know the actual average direct milk price and price paid for milk from co-operatives.