Market activity appeared to ease in February, pushing fat prices downwards.
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Proteins stayed more stable, but with little activity to move them up further after the increase seen last month.
Milk supplies were plentiful but demand was lacklustre, held back by the upcoming flush and Brexit making people reluctant to commit to forward sales.
The strengthening of the pound in the latter part of February may have also put some downwards pressure on fat prices.
Cream prices trended downwards in February, particularly in the last two weeks, with prices starting in the region of £1,700/tonne but ending the month in the mid-low £1,500’s.
The market was pressured from both the demand and supply ends, with a weakening butter market having a knock-on effect on cream demand, while milk production continued to perform well.
Overall cream prices fell 6% on the average price for January.
Butter markets also eased through the month, with prices generally falling to between £3,600 and £3,700 by late February.
Demand has been lacklustre, with buyers unwilling to commit.
With good milk production currently, and the flush not far away, there is little incentive to buy.
Nervousness around Brexit may be further encouraging buyers to wait.
Storage is an additional consideration, as there have been reports that space is very limited for dairy and other food products.
The SMP markets were also quiet in February, with prices moving little as a result.
Brexit nerves and anticipation of the flush may have encouraged some buyers to hold off.
The boost to the market from emptying intervention stocks has eased off for now.
In those cases where SMP prices did increase slightly it could be more from a positioning exercise than real market movement.
Cheddar markets were generally stable this month, but this was largely due to activity being very quiet.
Very few trades were reported to have taken place as people wait to see what will happen in the coming months. ■