UK dairy commodity prices have strengthened, with butter up 3% to £3,540/t in September, skimmed milk powder up 11% to £2,730/t, and mild cheddar up 9% to £3,330/t. “The big driver that is keeping things positive is consumer demand for protein, with sales of cottage cheese and Greek yoghurt keeping strong,” said Susie Stannard, lead dairy analyst at the AHDB. Butter is still in oversupply, cheddar stocks are balanced more finely, she added.

But globally, markets remain under pressure. “The US has become a powerhouse, from exporting very little of its milk to about 17% of its total output – it’s really undercutting the rest of the world’s prices,” said  Stannard. “My broad outlook is fairly bearish in terms of domestic milk supplies; hopefully that might give some support to farmgate milk prices. “But it needs to be underpinned by commodity values in the long term. I don’t think we should expect to see milk prices coming up to what they were.”