UK SMP firms as pressure remains on butter and cheese

The UK dairy market is showing a mixed picture, with SMP values strengthening while pressure remains across butter, cream and cheese. Low powder stocks and steady demand are supporting SMP, while increasing milk availability is easing some of the tension seen earlier in the cheese market. At the same time, weaker butter values and volatile spot milk continue to shape processing economics across the sector.A second consecutive Pulse auction brought further strength for SMP, with Arla’s product selling at the equivalent of EUR €3,320 per tonne. Probably no coincidence, this is the same level as the Dutch food-grade SMP price. This equates to around GBP £2,830 (EUR €3,341) per tonne, but UK SMP is, according to some traders, as high as GBP £2,900 (EUR €3,424) per tonne, the highest level for four years.Firm market sentimentMarket sentiment among UK traders remains firm, supported by low stocks, decent demand and dryers that may not be short of milk, but have less available than they have been accustomed to in recent months. EU futures are also at higher levels. Last week they increased by almost EUR €200 per tonne, averaging around EUR €3,450 per tonne over the next few months.UK-origin butter is in a better position than in the EU, although it is facing similar pressure. Fresh Dutch butter fell another EUR €50 per tonne to EUR €3,950 per tonne, equivalent to around GBP £3,350 (EUR €3,955) per tonne. UK-origin butter is higher at around GBP £3,500 (EUR €4,132) per tonne, down approximately GBP £50 (EUR €59) per tonne on last week.Cream pricing difficult to supportCream is broadly stable at around GBP £1.56 (EUR €1.84) to GBP £1.68 (EUR €1.98) per kg, broadly comparable with equivalent European levels. This is well below its recent peak of GBP £1.75 (EUR €2.07) per kg. However, some of the milk prices being paid this month would require a cream price of around GBP £1.80 (EUR €2.13) to GBP £1.90 (EUR €2.24) per kg to underpin them. At current butter values, that level of cream pricing is becoming increasingly difficult to support.Cheese buyers more relaxedCheese is holding in the UK at around GBP £3,400 (EUR €4,014) per tonne, although perhaps only just. Rising milk volumes both in the UK and Ireland mean that some of the earlier pressure has eased and buyers appear more relaxed than they were a month ago.Mature Cheddar is trading either side of the GBP £4,000 (EUR €4,722) per tonne threshold, while extra mature is around GBP £4,250 (EUR €5,017) per tonne, although lower values are circulating across all three maturity types. Promised milk prices of between 39p (approximately EUR €0.46) and 41p (approximately EUR €0.48) per litre appear better supported by mature and extra mature cheese values than by mild Cheddar values. Consequently, a wide gap is developing between the milk prices offered by different manufacturers.Market pressure on mozzarellaEuropean mozzarella has declined for five consecutive weeks, despite a EUR €50 per tonne uptick this week. Indications are now between EUR €3,400 and EUR €3,550 per tonne, equivalent to approximately GBP £2,900 (EUR €3,424) to GBP £3,000 (EUR €3,542) per tonne. UK sellers indicate values closer to GBP £3,100 (EUR €3,660) per tonne, although market pressure remains evident.Spot milk remains volatile, generally ranging from the high 30p’s (approximately EUR €0.45 to €0.46 per litre) to 46p (approximately EUR €0.54 per litre), reflecting several factory breakdowns and shutdowns this week.Currency disclaimer: GBP-to-EUR conversions are indicative and have been calculated using a reference mid-market exchange rate of GBP £1 = EUR €1.1805 on 5 October 2026. Converted EUR values are rounded and are provided for comparison only. The original GBP values remain the basis of the UK market observations. Exchange-rate movements may cause equivalent EUR values to differ over time.