Wholesale milk supply has shown a 2.2% rise in December on the previous year, with the marketplace seeing a higher demand for powder over fats.

According to the latest wholesale dairy report by DairyCo, UK deliveries of milk stood at 1,095m litres in December 2011 23m litres higher than 2010 with GB milk production rising by 1.5% compared to the previous year.

Cream appears to have suffered the most despite some stabilisation, with prices falling 15.2% from Christmas, when it was £1,450/tonne (t) to £1,230/t in January. Butter has also weakened, as it has throughout Europe, with a 3.3% fall to £2,900/t in January from the previous month, and a 9.4% drop since January 2011 when it was priced at £3,200/t. But the report said the situation may become easier when applications for putting stock into private storage aid begin this month.

Despite seeing a 2.4% decline in price from December 2011 (£2,100/t) to January this year (£2,050/t), skimmed milk powder has shown a 5.1% increase since last January, when it was priced at £1,950/t.

Cheddar prices have shown no movement from December 2011 to last month, but since January 2011 they have shown steady growth, with mild cheddar increasing by 6.4% to £2,925/t, and mature varieties up 4.9% to £3,200/t.