UK dairy market stays firm despite weaker European prices

European and global dairy production remains relatively strong, and this is having a sobering impact on the European market. Consequently, European and global commodity prices have eased this week, but the UK remains firmer because domestic supply is tighter. Although confidence is cautious. Useful amounts of rain, strong grass growth, an end to the seasonal trough and higher forward milk prices have also improved the short-term supply situation slightly.The latest production data show that UK milk volumes are flatlining again at the seasonal trough and are tracking at the same level as the three-year average. UK milk volumes over the two weeks to 12 September have averaged 38.90 million litres per day, down 1.33 million litres per day, or 3.30%, compared with last year and 0.4% above the average. GB milk volumes average 32.32 million litres per day, down 1.27 million litres, or 3.8%, compared with last year but 0.2% above the long-term average.Cheese remains the major concernCheese remains the major concern, and there has been no material price progress over the last two weeks. Some UK processors have raised their prices significantly recently because of low stocks and tight milk supply, but few are actually selling, and buyers appear reluctant to commit. Other processors remain cautious, and there is a wide gap between the highest- and lowest-paying cheddar makers. For November, there is currently a 5p (€0.06) differential, for example.While British mild is around £3,400 (€3,963), there needs to be a significant increase in the price over the next six weeks in order to pay for the milk prices announced. Mature and extra-mature cheddar are extremely scarce, at around £4,000 (€4,662) for mature and £4,150 (€4,837) for extra mature, so this will help. The surge in the GDT price for cheddar, albeit from a very low base, will also do no harm.UK cheese market remains insulated from EuropeBut the fact is that while the EEX cheddar price rose to £3,270 (€3,811), EU trader prices and futures remain lower at £3,180 (€3,706). Unless the UK cheese market remains insulated from Europe, and it might, milk prices above 40ppl (€0.47/litre) may be unsustainable for all but the most elite processors. Current returns do not support those announced prices.EU butter is quoted at between €3,750 and €4,200, with a midpoint of €4,000, equating to £3,425 (€3,992). As with cheese, however, UK butter is stable at £3,550-£3,600 (€4,138-€4,196). UK cream is £1.68-£1.75 (€1.96-€2.04) and is also relatively stable.UK SMP remains scarce and in good demand, with some sellers quoting £2,750 (€3,205). It is also commanding a premium, as UK driers are generally shorter of milk than they were due to the drop in milk volumes.Spot milk is between 42p and 50ppl (€0.49-€0.58/litre).Currency disclaimer: Sterling prices have been converted into euros using the prevailing GBP/EUR exchange rate on 21 September 2026. Converted euro values are indicative and have been rounded for readability.