UK Dairy Product Retail Prices

The change in retail prices that hit national news headlines in August was a reduction in the price of some branded liquid milks which was followed by a brief promotion of own label liquid milk at heavily discounted prices in some supermarkets. The large rise in the price of Country Life butter last month was followed by a rise in the price of Anchor in August. There has been an increase in English Mild Cheddar prices at one major retailer.

The period of retail price stability that followed the liquid milk price discounting in June came to an end in mid-August when Tesco announced a discounted price promotion on Wiseman's Fresh 'n' Low brand milk. Other supermarkets followed by offering discounts on Cravendale branded milk which like the Tesco promotion, are ongoing. There was a further response by some supermarkets offering a heavily discounted price on own-label 4-pint polybottles (-44p per a 144p pack) over a three day period, but this has since come to an end. This price discounting of 4-pint polybottles has been reflected in the table below by reducing the price in August to 142p per pack.

Butter prices have moved to historically high levels in August and are some 50-60% higher than prices of a year ago. Anchor butter recovered all of the losses in retail price since March and stands at 122p per 250g pack. The price of Country Life slipped marginally in August but remains at its second highest monthly level ever.

The retail price of fresh cream was unchanged for the fourth month and continues at its highest monthly level for many years, nearly 60% up on levels of a year ago.

The price of English Mild Cheddar rose by 40p per kg for 250g packs in June, the equivalent of £400/t or over 4ppl milk equivalent. The table below shows the effect of a further rise in the retail price in August at one supermarket chain. The retail price of English Mild Cheddar is now £1,750/t higher than prices of a year ago, up by over a third. The price of Budget Mild Cheddar has not increased since January and stands at a discount to English Mild Cheddar of over 30%. Mature Cheddar prices vary from one retailer to another and are often on promotion, but currently they are about £870/t up on prices of a year ago.

DAIRY PRODUCT RETAIL PRICES
Pence	AUGUST 2008	1 month before	12 months before
Liquid milk, 4 pint polybottle	142	144	110
Doorstep milk (1 pint)	56	56	48
Fresh Double Cream, 568ml	168	168	106
Butter, Country Life, 250g pack	105	106	65
Butter, Anchor, 250g pack	122	115	80
Cheddar, English Mild, own label (250g pack), price per kg	652	648	477
Cheddar, English Mature, branded, price per kg	787	787	700

Source: Various

 

UK Dairy Product Retail Price Indices

The RPI in July fell marginally (by 0.1%) on the previous month, but it was still higher than a year earlier, by 5.0%. The liquid milk and cheese indices fell in July by 0.3% and by 0.7% respectively in relation to June (after two previous months of significant increases). The butter price index, however, reflected retail price increases in July and rose by 2.9% compared to June. The year on year changes to the dairy product price indices continued to far outstrip the change to the RPI because of the large retail price changes that took place from September 2007. Butter has increased by nearly 37% year on year, cheese by 18% and fresh milk by 19%.

PRODUCT PRICE INDICES
	JUly 2008	compared with 1 month before	compared with 12 months before
RPI	216.5	-0.1%	+5.0%
Fresh Milk	231.2	-0.3%	+19.4%
Butter	233.7	+2.9%	+36.5%
Cheese	208.3	-0.7%	+18.0%

Source: National Statistics Office